Which group in the IT controls ensure the validity completeness and accuracy of financial transactions?

Monitoring of Key Reports

Monitoring of key reports consists of the following activities:

Inhaltsverzeichnis Show

Monitoring of Key Reports
General Ledger (GL)
Compensation Expense
Submission and Storage of Division Key Financial Report
Which controls do organizations use to ensure the completeness accuracy and validity of financial transactions?
How do you ensure completeness and accuracy?
Which type of audit ensures the accuracy of financial statements?
What is completeness and accuracy in audit?

Review: Examining two key management reports for perceived anomalies and errors of substance, based on the reviewer’s experience and knowledge of the unit’s operations. This activity is at a summarized or overview level. More detailed data only needs to be reviewed for anomalies. It is expected that someone familiar with the financial activities performs the review. Anomalies should be identified and explanations documented and saved.

Acknowledgment: Attestation by reviewer that he/she reviewed the information, investigated anomalies, ensured the correction of errors, and can provide reasonable assurance of the propriety (completeness, accuracy, and validity) of the information.

Review and acknowledgment activities may be delegated and performed at a lower organization level, but the Division Finance Leader must review the designated key reports and provide acknowledgment for the division level to the Controller’s Office.

There are two categories of key financial reports to monitor:

General Ledger
Compensation Expense

Review of the key financial reports is encouraged, but not required, on a monthly basis since the passage of time may make it more difficult to detect and act upon erroneous reported financial results or transactions. All reviews must be done at least quarterly.

Acknowledgment of the reviews is required on a quarterly basis by the end of the month following the previous quarter close for Q1 to Q3. Q4 acknowledgment is due two weeks after actual data is loaded into the reporting systems. Acknowledgments of review of the key financial reports occur with submission to the Controller’s Office via Berkeley Box.

General Ledger (GL)

The first key financial report monitoring activity is to review actual financial results at a summarized level. This review involves analyzing results through variance analysis of revenues, operating transfers, and expenses by comparing the actual activity to budget and prior year actual results. The CalPlanning Reporting GL Summary – Monthly Comparative Actuals report was designed to provide activity at this summarized level.The reviewer should:

Download and save an electronic copy of the report. Document review comments and explanations in the saved electronic report file. Additional information in obtaining the reports and documenting comments is available in the job aid - Quarterly Financial Comparative Reporting Review Procedures (PDF). Note that this report is now broken out in three tabs: Current Funds Excluding C&G, Contracts & Grants, and Agency Funds.

Review the year-to-date (YTD) actuals versus budget and prior year actuals variances for each individual summary line. Based on the reviewer’s knowledge and expectations of the unit’s operations, validate that the current YTD actual results are reasonably complete, accurate and valid.

Any unusual or unexpected variances for a particular summary line item should be investigated. Provide explanations for your unit's significant variances in the Comments section of each tab, and ensure corrective action is identified and taken on a timely basis, if applicable.

Be mindful of areas in which activity significantly fluctuates during the year, and note these fluctuations when analyzing the data. Current year monthly actuals amounts are included in the report for this purpose.

Drill down to obtain more detailed account data for any line item amounts with exceptional variances. (Note: Because UC financial statements are classified primarily based on the account classifications, the focus of this review is on that perspective.)

For some variances, it may be necessary to run the Cal Answers General Ledger Reporting Detail report to review and substantiate the actual detail transactions to determine the explanations. In reviewing the detail transactions in these instances, the reviewer should look for unusual, inaccurate or invalid transactions. The following guidelines provide some additional instruction of what to look for in the examination of detail transactions to explain variances:

Unusual: One-time transactions, transactions related to new economic events or contractual agreements, or transactions related to agreements with significant rate or volume changes

Inaccurate: Transactions that were incorrectly coded, with wrong amounts, or recorded in the wrong period (timing difference)

Invalid: Transactions that did not relate to economic events that occurred or were not executed according to policies and procedures, including approval

Compensation Expense

The second key financial report monitoring activity is the review of the Cal Answers General Ledger Compensation by Accounting Period Report. Salaries and wages are the single largest line item of all campus revenues and expenses.

Therefore, salaries and wages expenses warrant more detailed management review. They need to be reviewed to ensure they are associated only with existing employees and that the amounts are accurate for employees’ services in the period. The Cal Answers General Ledger Compensation by Accounting Period Report provides a list of employees and payroll amounts by account by month.

Reviewer Responsibilities

The reviewer should:

Download and save an electronic copy of the report. Document review comments and explanations in the saved electronic report file. Additional information in obtaining the reports is available under the Cal Answers Dashboard for General Ledger Reporting - Compensation By Accounting Period. For specific filters to use in obtaining the report please refer to the job aid - Quarterly Compensation Report Review Procedures (PDF).

Scan the list of transactions paying specific attention to employee names. Ensure employees were valid for the period.

Verify that new hires, terminations, merit increases, retroactive payments and overtime payments were recorded correctly.

If amounts appear unfamiliar, unusual or incorrect, research the amounts in more detail by reviewing the employee detail payroll records.

Ensure corrective actions are identified and taken on a timely basis, if applicable.

Submission and Storage of Division Key Financial Report

Berkeley Box is a cloud-based platform that allows DFLs to submit and securely store their verified key financial reports with the Controller’s Office.

Key features of Berkeley Box are as follows:

Box file folders are established, monitored and maintained by the Controller’s Office.
Each Division Finance Leader (DFL) is sent an email inviting him or her to click on the “Log in” button thereby creating a new account of which access is strictly allowed only to the assigned/invited DFL - Division’s Box file folder.
- DFLs are not granted access to other Divisions’ file folders and alternatively, DFLs may not grant access to their staff.
- These emails contain brief instructions explaining both the purpose of and why it is only the DFL is permitted access to these files.
Box may be accessed at https://berkeley.app.box.com/login and uses an individual’s network username and password to login.

Following the completion of the General Ledger and Compensation report review as specified by the instructions, save the document and upload it to your respective Division’s file folder. When saving the document, please adhere to the Naming Convention:

When saving your reports and labeling the file, please do so in the following fashion as this will allow for easier retrieval and uniform identification. At the end of the default file name insert:

Division Node
Specify which is applicable - Q1, Q2, Q3 or Q4
Example – GL Summary - Monthly Comparative Actuals COCHM Q2

Recommendations

Access Box through Google Chrome
Viewer Uploader Access for DFLs available as reference guide

Which controls do organizations use to ensure the completeness accuracy and validity of financial transactions?

Internal controls are the mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability and prevent fraud.

How do you ensure completeness and accuracy?

There are generally two ways to gain assurance for completeness and accuracy. One is to compare the report to information or data external to the system and the other is to compare the report to the internal database.

Which type of audit ensures the accuracy of financial statements?

The purpose of an internal audit is to ensure compliance with laws and regulations and to help maintain accurate and timely financial reporting and data collection. It also provides a benefit to management by identifying flaws in internal control or financial reporting prior to its review by external auditors.

What is completeness and accuracy in audit?

Completeness — all transactions that should have been recorded have been recorded. Accuracy — the transactions were recorded at the appropriate amounts. Cutoff — the transactions have been recorded in the correct accounting period.