YES NO COMMENTS

A. Organizational Background
and Governance

1 Does your department have an
up-to-date copy of the
departments policy and
procedure manual?

2 Are written policies and
procedures maintained for all
departmental functions?

3 Are procedures reviewed
annually for possible updating?

4 Does the organization have an
organizational structure that
defines lines of authority and
responsibility?

5 Are current job descriptions on
file for each employee in the
department?

6 Is the organizational chart up to
date?

B Control Environment
Integrity and Ethical Values
1 Does the company have a code
of ethical conduct that has been
made available to all employees?

2 Have transactions been
executed in accordance with
integrity and ethical
values/codes?

3 Are procedures documented,
kept current and readily
available for use by all
employees?

4 Are there related employees with
job assignments that create
opportunities for collusion?

Management Philosophy and
Operating Style

1 Are all major channels of
communication utilized
effectively?

2 Does the management use
budget, spending plans, etc. to
review the companys

performance?
3 Are the budget system and the
planning process integrated?

4 Do reports and summaries of
operations provide essential and
timely information necessary for
managerial monitoring and
control?

5 Are operations made in
accordance with statutes
governing the company?

Commitment to Competence
1 Are responsibilities clearly
defined in writing and
communicated?

2 Does the management
understand knowledge and
skills required to accomplish
tasks?

3 Does the management and the
employees get involved in
adequate training programs?

4 Are employees periodically
evaluated?

5 Do managers and supervisors
review the evaluations with their
employees?

6 Do accounting personnel have
the background, education, and
experience appropriate for their
duties?

Personnel Policies and
Procedures

I Recruitment
1 Are skills and abilities required
for positions clearly defined by
the managers responsible for
those positions?

2 Does the description of job
responsibilities for the position
match the responsibilities
stipulated for the classification?

3 Is the selection process
designed to hire the best
candidates for the positions?

II Compensation
1 Are surveys made periodically
to benchmark compensation?
a. If yes, are adjustments made
to bring compensation closer to
benchmark?

2 Are benefits awarded to
employees?

3 If there is change in
classification or compensation:

4 Do the proper managers
authorize changes in
classification or
compensation?

5 Are reasons for changes in
compensation or
classification properly
documented in the files?

6 Are the changes in
compensation/classification
properly approved by HR
analysts?

III Job Responsibilities
1 Do statements of job
responsibilities indicate clearly
show employees are expected to
contribute to the Company
goals?

2 Are key job responsibilities
approved by the department
head?

3 Are significant changes in
assignment documented in
writing?

IV Training
1 Are resources and tools required
by employees to carry out their
responsibilities identified?
a. If yes, are funds budgeted to
acquire the required resources,
tools and training?

2 Is the training required by
employees to maintain their
skills identified?

3 Have the personnel, who
initiate, approve, or review
financial transactions, received
appropriate training on the
various financial systems?
V Employee Performance
1 Are performance standards or
expectations clearly
established?

2 Is performance assessed
periodically against the
standards and documented?

3 Are positive results reinforced
through recognition or awards?

4 Is action taken to improve
performance that is below
standard?

VI Communication
1 Are the company goals and
departmental goals spelled out
clearly for all employees to see?

2 Are important instructions such
as project/contract assignments
given out in writing?

3 Is there a way through which
employees can freely express
their concerns and suggestions
to their managers?
If yes, are the managers
required to follow up and
respond to their employees
concerns and suggestions?

Assignment of Authority and
Responsibility/
Organizational Structure

1 Has the management provided
resources to ensure compliance
with the requirements of the
Philippine Laws?

2 Are there sufficient training
opportunities to improve
competency and update
employees on new policies and
procedures available?

3 If known areas of knowledge are
limited, has help been enlisted

from peers, auditors or outside
consultants to identify
alternatives and suggest
solutions?
4 Have the managers been
provided with clear goals and
direction from the governing
body or top management?

5 Are responsibilities divided so
that no single employee
controls all phases of a
transaction?

C Risk Assessment
1 Are there mechanisms to
identify and react to changes
that can have a more dramatic
and pervasive effect on the
entity, and may demand the
attention of management?

New laws or regulations
that affect the entity or its
activities?

New or redesigned
information systems?

New technology
incorporated into the
information systems?

2 Do controls exist for approving
decisions regarding financing
alternatives and accounting
principles, practices, and
methods?

3 Has management identified and
analyzed entity risks relating to:

Changes in the operating
environment?

New personnel?
New information systems?
Rapid growth?
New technology?
Accounting
pronouncements?

5 Has management estimated the
significance of the risks relevant

to the preparation of financial
statements?
6 Has management taken
appropriate steps to manage
these risks?

D Information and
Communication System

1 Is a budget calendar used for
the orderly submission and
approval of the budget?

2 Are budgets prepared for all
significant activities regardless
of whether mandated by law?

3 Is the budget prepared in
sufficient detail providing a
meaningful tool with which to
monitor subsequent
performance?

4 Are estimated revenues and
appropriations recorded in the
accounting records for later
comparison to actual amounts
realized or incurred?

5 Are plans and budgets
effectively communicated
throughout the organization?

6 Are actual expenditures
compared to budget timely with
reasonable (monthly) frequency?

7 Are reports discussed with
departmental personnel and are
there explanations for
significant variations from
budget?

8 Are the principle accounting,
treasury, and custody functions
segregated?

9 Do procedures exist to ensure
that only authorized persons
can alter or establish new
accounting principles, policy, or
procedure to be used by the
entity?

10 Is there timely and appropriate
follow-up action taken by

management resulting from
external party communications,
such as:
Customer complaints?
Notification of errors in billings?
Notification of inappropriate
behaviour by an employee?

E Control Activities
Cash & Check Receipts
1 Are all monies received made
payable to department/office?

2 Are the receipts restrictively
endorsed immediately upon
receipt?

3 Are cash receipts kept in secure
storage until deposited?

4 Are deposits made daily to the
cashier's office?

5 Are cash receipts deposited
intact with no expenditures
made from collections?

6 Is cash that has been received
and deposited reconciled
monthly?


7 Are cash receipts recorded and
used only for the purpose for
which they were received?

8 Are cash handling
responsibilities rotated among
two or more employees when
possible?

9 Are numerically controlled
receipt slips used for all cash
receipts received in the
department?

10 Are numerically controlled
cash-receipt slips accounted for
and reconciled on a
regular basis

Petty Cash
1 Are petty cash funds kept in
secure storage?

2 Are policies on the use of petty
cash funds followed?

3 Do all petty cash
disbursements require original
receipts for reimbursement?

4 Are surprise cash counts of
department petty cash and
change funds performed on a
regular, random, and
unannounced basis?

Payments
1 Are the following duties
distributed among at least two
individuals:

Authorize payments?
Have custody of cash?
Record payments?
Reconcile cash payments?
2 Is there a policy that clearly
defines authorized payments?

3 Is the business purpose clearly
documented on all invoices and
other claims submitted for
payment approval?

4 Are all approved payments
supported by proper
documentation such as original
vendor invoices?

5 Are approved vendor invoices
and other approved claims
promptly entered into General
Ledger for payment?

6 Are blank checks, warrants and
signature plates safeguarded in
physically secure areas?

7 Do only authorized personnel
sign checks and claims?

8 Do these authorized signatories
review supporting
documentation before signing?

9 Are all expenditure transactions
and related vouchers
independently reviewed for
completeness, accuracy, and
compliance with company
policies and in agreement with
supporting documentation

before being approved for
payment?
Expenditures
Travel Expenses
1 Is all travel reviewed for benefit
to the department versus its
cost prior to trip
approval being given?


2 Are travel plans made
sufficiently in advance to obtain
the most favorable
transportation rates?


3 Are travelers required to provide
original receipts for all travel
expenses?

4 Are direct advance payments
and use of credit cards
encouraged over cash travel
advances?

5 Are travel expense reports
reviewed in detail prior to being
approved for reimbursement?

6 Are travel expense reports
required to be completed in the
time frames specified by policy?


7 Are unauthorized personal
expenses excluded from travel
expense reports?


8 Are travelers required to review
the travel policy prior to
traveling?

Purchasing
1 Who is responsible to make
purchases on behalf of the
entity?

2 Are there a current purchasing
policies and procedures
manual?

3 Do personnel independent of
performing the purchasing
function, and cash receipts

functions?
4 Are steps taken to ensure that
goods received are accurately
counted and examined prior to
approving for payment?

5 Are payments made only on the
basis of original invoices?

6 Are suppliers paid on a timely
(monthly) basis?

Payroll
1 Are employees required to
maintain attendance records?

2 Do attendance records contain
sufficient detail on work
assignment for labor cost
distribution purposes?

3 Are attendance records in
compliance with Labor Code
requirements?

4 Are attendance records
approved by supervisors before
submission to payroll
department with direct
knowledge of actual time
worked?

5 Are Time Cards or Sheets signed
and submitted by employees at
the end of (or the last day of
work) the period?

6 Is all overtime and
compensation time recorded on
the companys Payroll System?

7 Are the employees paid for
Vacation or Sick Time in
advance?

8 Are accumulated leave records
reviewed at year-end?

9 Do payroll checks contain detail
of gross pay and deductions?

10 Does an appropriate person
review monthly payroll-related
accruals for completeness and
reasonableness?

11 Does someone independent of
time keeping and preparation of

payroll checks, or envelopes
distribute paychecks?
12 Are payroll checks released only
upon presentation of proper
identification of the employee?

13 Are employees prohibited from
accepting another employee's
payroll check?

14 Are unclaimed/undistributed
payroll checks returned to an
employee who is not associated
with the payroll function?

F. Monitoring
1 Does management exercise
reasonable control over
activities so that there is an
absence of crisis conditions in
the entity or accounting (e.g.
well organized work areas, no
unusual delays, and adequate
documentation for all significant
transactions)?

2 Do personnel, in carrying out
their regular activities, obtain
evidence as to the adequacy of
internal controls (for example, is
data used to manage operations
periodically compared and
reconciled to financial reporting
information)?

3 Is management adequately
involved in designing and
approving accounting system
procedures?

4 Does management take
appropriate follow-up action for
identified problems or
weaknesses in internal controls
(including matters
communicated by the auditors)?

5 Are there periodic comparisons
of amounts recorded by the
accounting system with physical
assets?

6 Are budgets submitted to
administrators in accordance
with an established time
schedule?
7 Are there established
procedures for amendments of
budgets that require adequate
support (e.g., forecasts) for
authorization of amendments?

G Fraud Indicators
1 Is the work of all staff members
double-checked on a random,
unannounced basis?

2 Are all staff members required
to take one full week of
continuous vacation time
annually, especially those
handling or posting cash
receipts?

3 Are duties segregated in all cash
handling functions?

4 Are job duties rotated when
possible in cash handling
functions?

5 Does more than one person
have access to every screen or
software application in the
department?

6 Is employee performance
reviewed and documented on a
regular basis?

7 Are unusual trends or
discrepancies in department
accounts identified and
reconciled monthly?


8 Are missing numbers in
sequence?