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Risk Matrix of Different Processes
Mapped with Assertions
[Submitted by CA. Sachin Gupta,
Chartered Accountant,
Delhi]
November 06, 2007
Purchase and
Payables
RISKS
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RISKS |
ASSERTIONS |
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R1 - What controls
that general ledger coding of purchases are correct with in accounting
year? |
Completeness |
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R2 - What controls
that invoices reflect correct prices, correct quantities and other
valuation information as required? |
Measurement/ Valuation/ Rights and
Obligations |
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R3 - What controls
that payables for goods are recorded in a timely manner with in
accounting year? |
Completeness |
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R4 - What controls
that purchases are correct recorded in the proper period? |
Completeness/ Rights and Obligations |
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R5 - What controls
that payables for goods purchased by the organization are correctly
recorded with in accounting year? |
Completeness |
PAYROLL
RISKS
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RISKS |
ASSERTIONS |
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R1 - What controls
that coding of payroll to the general ledger is correct with in
accounting year? |
Completeness
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R2 - What controls
that fictitious payroll disbursements are not made with in accounting
year? |
Existence/Occurrence |
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R3 - What controls
that payroll expenses are correctly recorded with in the accounting
year? |
Completeness |
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Completeness |
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R5 - What controls
that work performed by workers is recorded by the payroll department
with in accounting year? |
Completeness |
INVENTORY
RISKS
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RISKS |
ASSERTIONS |
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R1 - What controls
that book-to-physical adjustments are correctly calculated and
recorded with in accounting year? |
Completeness/ Measurement/Valuation |
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R2 - What controls
that inventory counts include offsite inventory at the time of
physical verification performed by management or third party? |
Existence/Occurrence/
Completeness/Rights & Obligations |
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R3 - What controls
that inventory counts do not include goods owned by others at the time
of physical verification performed by management or third party? |
Existence/Occurrence/ Right &
Obligations |
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R4 - What controls
that inventory counts, compilations and descriptions are correct at
the time of physical verification performed by management or third
party? |
Measurement/Valuation |
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R5 - What controls
that inventories are fully counted at the time of physical
verification performed by management or third party ? |
Completeness/Existence |
Property, PLANT
and Equipment
RISKS
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RISKS |
ASSERTIONS |
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R1- What controls
that depreciation is properly recorded on related assets eligible for
depreciation? |
Completeness |
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R2 - What controls
that disposed fixed assets including (sales, written-offs) do not
remain recorded with in accounting year? |
Existence/ Occurrence |
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R3 - What controls
that depreciation expense and gain/loss is correctly recorded on
depreciable assets? |
Measurement/ Valuation |
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R4 - What controls
that depreciation is calculated using appropriate rates for respective
class of assets? |
Measurement/ Valuation |
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R5 - What controls
that assumptions taken by management for impairment indicators are
properly identified? |
Measurement/ Valuation |
CASH DISBURSEMENT
RISKS
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RISKS |
ASSERTIONS |
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R1 - What controls that
general ledger coding of cash disbursements are correct with in
accounting year? |
Completeness |
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R2 -
What controls that cash disbursements / transfers are recorded in the
proper accounting period? |
Completeness |
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R3 -
What controls that duplicate postings of cash disbursements are not
made to the general ledger? |
Existence/ Occurrence |
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R4 -
What controls that cash disbursements are real with in accounting
year? |
Existence/ Occurrence |
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R5 -
What controls that cash disbursements in an organization are correct? |
Completeness |
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