INTERNAL CONTROL SYSTEM

INTERNAL CONTROL SYSTEM

1. OBJECTIVE

   • S-O-F-A-T

2. BENEFIT

   • R-E-C

3. PROCESS

   • OBJECTIVE IDENTIFICATION
   • SET TARGET
   • MEASURE OUTPUT
   • COMPARE OUTPUT vs. TARGET
   • IDENTIFY CORRECTIVE ACTION
   • IMPLEMENT CORRECTIVE ACTION

4. CONTROL LIMITATION

   • HUMAN ERROR/ FRAUD
   • EMPLOYEE COLLUTION
   • MANAGEMENT BY PASS
   • COST > BENEFIT
   • DESIGNED FOR ROUTINE TRANSACTIONS
   • DEPEND ON DATA PROCESSING METHOD

5. SOUND CONTROL SYSTEM

   • R-E-C
     • REPORTING
     • EMBEDDED
     • CHANGING

6. RISK & CORPORATE GOVERNANCE

   • CG REPORTS
     • ADDRESS
       • SHAREHOLDER'S CONCERN
         • DIRECTOR NOT ACHIEVING ADEQUATE RETURN FOR RISKS INCURRED
     • PROVIDE MECHANISM
       • CONTROL DIRECTOR WHO TAKING EXCESSIVE RISKS
     • STRESS
       • DIRECTOR'S RESPONSIBILITY
         • MONITORING RISK
         • DISCLOSING RISK

7. ROLES & RESPONSIBILITIES

   • CEO
   • BOARD OF DIRECTORS
   • RISK COMMITTEE
   • EXECUTIVE MANAGEMENT
   • HEAD OF BUSINESS UNITS
   • INTERNAL AUDITOR
   • EMPLOYEE
   • EXTERNAL AUDITOR

8. COSO'S ERM FRAMEWORK

   • CONTROL ENVIRONMENT
   • RISK ASSESSMENT
   • CONTROL ACTIVITIES
   • MONITORING
   • INFORMATION & COMMUNICATION