Effective Control Documentation
Successful control documentation is essential for auditors. By precisely describing the control and addressing the key questions outlined below, you can ensure thorough understanding in your workpapers.
Key Questions for Documenting Controls
When?
When does this control become necessary?
Identify the specific events or transactions that trigger the need for this control. Determine whether it is a daily, weekly, monthly, or annual requirement.
Why?
Why is this control implemented?
Adults prioritize tasks they understand, so it's crucial to clarify the purpose of the control, enhancing the likelihood of its priority and implementation.
Who?
Who is responsible for this control?
Designate a specific role, rather than an individual, responsible for the design and implementation of the control to allow for changes in personnel.
Tools and Resources?
What tools are required to implement this control?
Specify any technologies, tools, or specific skill sets necessary for implementation and how these resources can be accessed.
Are There Exceptions?
When can this control be bypassed or overridden?
Outline scenarios where rules might be bent to achieve desired outcomes, detailing any exceptions to the standard protocol.
Further Questions for Enhanced Control Documentation
What exactly is the control?
What is the objective of the control?
Why is the control crucial? Provide context and detail how it supports the organization's goals.
Are there any specific guidelines, requirements, or limitations related to this control?
What are the deadlines or specific time frames for implementing the control or achieving its objectives?
When does the control apply? Is it triggered by a specific event or time?
What quality standards are expected?
Are there any budget constraints or cost considerations?
How does the control affect profitability or other financial objectives?
What tools or technologies are necessary?
Who is accountable for meeting the control's objectives?
What skills are needed to achieve these objectives?
What additional resources might be required?
What does success look like for this control?
What deliverables prove the control's objectives have been met or that it has been implemented?
What related performance indicators should be monitored? Consider various types of metrics like input, process, output, and outcome.
How does this relate to the COSO model?
What obstacles might hinder achieving the control's objectives, and what strategies can overcome these issues?
Are there dependencies or collaborations necessary to meet the control objectives?
Is this considered a key control, thus taking priority over others?
Are there any special instructions or preferences?
How are these expectations communicated to those responsible and other stakeholders?
How frequently will this control be reviewed and enhanced?
What are the consequences of not implementing this control or the rewards for achieving its objectives?
What exceptions are there to this control, and under what conditions should it be bypassed?
What supporting documentation is needed to clarify the control further?
Resources for Auditors
By adhering to these detailed guidelines, auditors can ensure that the controls they document in their workpapers are clearly defined, comprehensible, and executable. This approach not only promotes thoroughness and precision in documentation but also supports an auditor’s accountability and effectiveness in aligning with auditing standards. Interested in refining your control documentation skills further? Explore our targeted resources designed to enhance your understanding and proficiency in creating effective workpapers.