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Internal Audit for Provincial Government of Cagayan.

What is Internal Control?. Basis of Internal Control in the Philippine Government.

What is Internal Control?. Internal control is an integral process that is effected by an entity’s management and personnel and is designed to address risks and to provide reasonable assurance that is in pursuit of the entity’s mission, the general objectives are being achieved. (INTOSAI, 2004).

What is Internal Control?. Internal control refers to the plan of organization and all the coordinated methods and measures adopted within an organization or agency to safeguard its assets, check the accuracy and reliability of its accounting data, and encourage adherence to prescribed managerial policies . (Section 123 of Presidential Decree No. 1445, as amended).

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National Guidelines on Internal Control Systems (NGICS).

Internal Audit Manual for LGUs (2016). A complement to the NGICS, the Internal Audit Manual for LGUs explains and clarifies the nature and scope of internal audit in the Philippine public sector, including its institutional arrangements, as well as its protocols and processes. It aims to assist LGUs establishing and developing internal audit to promote effective, efficient, ethical and economical operations in government..

General Objectives of Internal Control. Safeguard assets Check accuracy and reliability of accounting data Ensure economical, efficient and effective operations Comply with laws and regulations; and Adhere to managerial policies.

Internal Control Framework. Internal Control Objectives Internal Control Con Con Informati M I Enviro Activi and nitoring mu.

Monitoring. Information and Communication. Control Activities.

Control Environment. This is the scope and coverage of PGC’s internal control system which integrates all the other 4 internal control components that influence the direction and quality of PGC’s strategies and outcomes. • Elements: 1. Plan of organization (structure, management and personnel) 2. Coordinated methods and measures (policies, rules and regulations); and 3. Integral process (internal controls integrated in organizational and decision making processes to regulate operations to achieve expected results).

Risk Assessment. The overall process of identifying, analyzing and evaluating relevant risks to the achievement of the control objectives and determining the appropriate response. Risk Assessment Process Risk Identification - the identification of opportunities and threats to the achievement of the control objectives. Risk Analysis - the systematic use of information to identify the sources and to estimate the extent of the risk. Risk Evaluation - the process of evaluating the significance of the risk and assessing the likelihood of its occurrence which involves comparing the results of the risk analysis with the established risk criteria to determine where additional action is required..

Control Activities. The policies and procedures established to address risks and achieve the agency’s mandate and objectives . Controls include but not limited to any process, policy, device, practice, or any other actions which maintain and/or modify risk . Control Activities must be appropriate, cost effective comprehensive, reasonable, and must directly relate to the control objectives and mandate of the PGC. Control Activities includes: Risk Response Performance Review and Improvement of Operations and Processes Compliance Review and Improvement of Operations and Processes.

Information and Communication. This includes the records system which will ensure the transfer of the required information to employees and top management, to the public it serves, to other public service organizations, and to its network of organizations and sectors that need the information. Information must be shared in a determined format and communicated in a given time period which enables the parties concerned to fulfill internal control objectives and other responsibilities..

Monitoring. Aimed at assessing the quality of the internal control system’s performance over time. Considers the collective effectiveness of the five (5) components of internal control. It is aimed at ensuring that the other components of internal control continue to function over time in relation to the achievement of the control objectives and are modified appropriately to remain attuned to changes in objectives, environment, resources and risks..

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