Mr.

Bhushan Marathe, Chartered Accountant

What is Control Self Assessment ??? is a technique/tool

Purpose: to organizations.

gauge

internal

control

effectiveness

for

Definition by The Institute of Internal Auditors (IIA) CSA is a technique that allows managers and work teams directly involved in business units, functions or processes to participate in assessing the organization's risk management and control processes. In it various forms, CSA can cover objectives, risks, controls and processes.

CSA is not a complete process by itself, it does not substitute auditing efforts

Control Self Assessment Programmes

Allows

Internal Auditors
to gather relevant information about risks & controls; to focus on high risk/unusual areas; & to forge greater collaboration with operating managers & work teams.

Mangers to clarify business objectives; and to identify & deal with the risks in achieving those objectives.

A Control
Any action taken by management, the board & other parties to manage risk and

to achieve the established objectives &goals

Preventive Controls Design to discourage errors/ prevent irregularities from occurring. Proactive controls that prevent a loss Eg: Separation of duties, proper authorization, adequate documentation & physical control over assets.

Detective Controls Designed to find errors or irregularities after they occurred. Eg: Reviews, analyses, variance analysis, reconciliations, physical inventories and audits.

Internal Controls policies and instructions within an organization to prevent losses resulting from; Malfunction, Employee carelessness Error, fraud & neglect The Sarbanes-Oxley Act (SOX) 2002, introduced as a consequences of internal control failures across the globe, has emphasised that the need for internal control compliance and documentation

RETAIL STORE AUDITS 1) From retail perspective, there is an increased attention to Governance Compliance and Risk Management

2) An effective store compliance process can be achieved through; Traditional Audits Control Self Assessment

Audit Techniques

Traditional Audit

CSA Technique

Internal Audit team identifies issues and suggest remedial measures. Challenges: Infrequent coverage Audit team presence interrupts store operations Costly Time ineffectiveness.

Operations oriented. Provides auditors with additional hand & eyes, specialized expertise, operational knowledge and a commitment to implement internal audit recommendations. Challenges: Buy-in by the top management Training to all operating managers is critical pre-requisite

Benefits of CSA in retail Better results ( Participative and Collaborative Approach) Complete Coverage Optimum utilization of resources cost effectiveness Better Appreciation of Issues Focus: Risks and Controls

Appropriate remedial measures

Responsibility and Accountability

Pre-requisite of an effective CSA in retail

Mature state of operations

Communication, openness and trust Clarity of objectives Internal audit should study existing processes deeply Clear defined parameters Collection, collaboration & analysis of information collected through CSA Training to staff Lastly, above par facilitation skills of the internal auditor

Mr. Bhushan Marathe, C.A Phone No. +91 98223-77260 Email Id: