Deming, COSO, and Audit Standards: A Summary

Posted on Jan 4, 2025 in Other subjects

Deming Model

Principles:

1. Constancy 2. New Philosophy 3. Inspection 4. Eliminate 5. Improve Base Price 6. Training 7. Leadership 8. Discard 9. Remove Fear, barriers between departments 10. Elimination of harmful slogans 11. Quotas for quality (phase) personal 12. Achievements 13. Training 14. Transformation

Seven Deadly Sins

1. Lack of evidence in the millennium 2. Emphasis on short-term gains and immediate success 3. Evaluation 4. Annual address of the company based on company mobility 5. Direction only visible in figures 6. Excessive medical assurance costs 7. Costs

COSO Report

Process performed by the board of directors, management, and the rest of the staff of a body, designed to provide a reasonable degree of security regarding the achievement of targets in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.

Changes involved: All involved organization / is pursuing a degree of security only fair / expand the objectives of internal control

Elements Comprising Internal Control

  1. Control Environment: Ethical framework and professional context surrounding each organization.
  2. Risk Assessment:
    • Identifying threats in the environment that can affect the operation of the organization and the achievement of set targets.
    • Providing mechanisms to prevent and combat risks.
  3. Risk Control Activities: Procedures established to review activities to mitigate identified risks are being met (policy). Defined for all.
  4. Information and Communication: The information required to implement control activities and communication is the channel for their transmission.
  5. Supervision: Highlight of internal control element. Review of the entire internal control process. The ultimate purpose is adapting to changes in internal control that may occur within the organization, representing an evolution or maturation of the internal control system.

International Standards for the Practice of the Profession of Audit

SE engine functions in 3 blocks:

  • Attribute Rules: Treaty 4 Basics and Objectivity
    1. Independent
    2. Internal Auditor Expertise (Care) Care and Professional Training
    3. Quality Services
  • Performance Rules: Guidance provided for effective management of audit work: planning, program implementation process, and conclusions.
  • Implementation Guidelines: For the work of assurance (certification) and consultation activities.


Sarbanes-Oxley: Corporate Responsibility

A) Responsibilities of the Directorate: Financial liability for certified reports prior to the issue of the quarterly financial report, stating that based on their knowledge, the financial statements contain no errors or misleading information, and that the accounts reflect the financial and business operations.

The official signing the report is responsible for establishing and maintaining internal control, evaluating the internal control system, and filing a report on the financial statements for assessment purposes.

The officer must communicate to the auditors, the audit committee directors, and others any deficiencies in both the design and operation of the internal control system, and any fraud.

B) Functions of the Audit Committee → Within the annual accounts: Composition and functions of the audit committee: – Review plans, activities, and structure of the internal audit department – Procurement review and evaluation of the internal audit director – Review all internal audit reports and management responses – Review the adequacy of financial information systems and internal control.

Olivencia Report: Commission Recommended

Proposed structure of the board: President – Secretary of the Council – Ordinary directors

Executive Committee: Body officer. Auxiliary of and performance of their duties to the council. Must keep a true reflection of the council statement of contributed to maintain the balance of independent directors.

Control Committees: Board of review and follow-up support → Standing in some areas of special importance for governance of the company (accounting information and control, selection of directors and senior management, assessment and review of the remuneration policy and evaluation system of government and the performance of its rules)

Features or Requirements to Have an Audit Report to Achieve a Minimum Standard of Quality

Minimum content: Details of objectives and scope of our work

Description of procedures performed – Description of the weaknesses/challenges, recommendations for correction – Reviews of management and plans to avoid the weaknesses/challenges.

IIA. Section NIEAI → 2400 → communications from auditors → 7 basic requirements:

  1. Precise
  2. Objective
  3. Clear
  4. Concise
  5. Constructive
  6. Complete
  7. Timely

Item 2440 → Dissemination of results margin. Internal Audit. – The executive director makes reaching the target – Ban unless express, the executive director before delivering results to * Evaluate the potential for the organization * Consult with the senior management and/or legal advisor * Control the spread, restricting the dissemination of results

ERM

(Definition of risk categories – risk control components)

Definition: A system for detecting, identifying, and assessing individual risks of an area and the impact of various risks in the organization.

Risk Category: * Financial * Human Capital * Legal and Regulatory * Operating * Strategic * Technology

Components:

  1. Internal Environment
  2. Development of strategies and objectives for risk situations
  3. Identification of risks that may change
  4. Impact assessment
  5. Responses (avoid, reduce, OK as irrelevant)
  6. Control Activities
  7. Information and Communication System
  8. Monitoring

Environmental Information. Contents:

– Description and characteristics of systems, equipment, and facilities to improve and most significant environmental protection

– Expenses incurred in the year-end which is the protection and improvement of the environment.

– Provisions for liabilities and charges for environmental actions

– Contingencies related to the protection and improvement of the environment

– Full amount of the nature of environmental responsibilities

– Subsidies received from nature-environmental

EMAS

Audit management and environmental established by the European Union. Voluntary. Its purpose is to serve for assessing the environmental performance of companies and organizations. Environmental performance improvement. Open to all organizations in any industry. Importance 4 points: 1. Coverage of legal obligations 2. Best environmental performance of work 3. Communication 4. Involvement of foreign workers.

EMAS Registration: Phases of implementation: 1. Perform an environmental study 2. Establish an environmental management system 3. Overcome an environmental audit 4. Effect an environmental statement 5. Obtain independent verification from a certifying body 6. Register with EMAS in a responsible agency of a member state

To acknowledge ISO 14001 and pass EMAS ISO 14001: You must comply with 3 additional requirements: 1. Action 2. Transparency 3. Credibility.

EFQM Model

Focus model for total quality of organizations. Quality = customer satisfaction, employee satisfaction, and environmental satisfaction. Satisfaction is achieved through proper management of staff and resources, an accurate definition of the process, and leadership strategies ► Excellence in enterprise. To achieve this: Areas determined to improve – Establish specific action plans – Reassess after an evaluation of plans used – Feedback to the process

EFQM: Objective ► Organizations to help themselves better know

► Self-assessment criteria two types:

+ Criteria of Agents: Pick system management aspects of the organization. Are considered as the cause of results (profit to each agent obtained from the organization). Is analyzed: The leadership, policy and strategy, the staff, the partners and resources, processes

+ Performance Criteria (performance of the organization) are the agent each get profit organization. We analyzed: Customer satisfaction (results margin customers in) Employee satisfaction (results in employees), the impact of the organization in society, yields obtained by the organization in accordance with the strategic objectives with measures defined the satisfaction of the needs and expectations of tied agents.

Rules of assessment (for each of the criteria) ► (RADAR) – Planning – Develop outcomes – Deployment approaches to achieving and implants approaches – Evaluate the results and review approaches

: Assuring results margin AM / PYL / P REF approach and framework ª Objective structured for diagnosis (better to have meetings), allows comparison with similar organizations.