The COSO framework defines internal control as a process, effected by an entity's board of directors, management and other personnel, designed to provide "reasonable assurance" regarding the achievement of objectives relating to operations, reporting and compliance. In its definition of internal controls by ICAI, there is an additional category of safeguarding of assets included. Given the vast coverage of objectives listed and the consideration of factors required in evaluation, it is not viable to have a predetermined internal control mechanism. Standardization is critical and accordingly leveraging the internal control frameworks, each of the services have to be tailor-made to meet the client requirements. Some of our services relating to internal controls and risk mitigation are: Design and Implementation of Internal Controls"Designing and Implementing an effective internal control system can be challenging, and operating that system effectively and efficiently every day can be daunting. New and rapidly changing business models, greater use of technology, increased regulatory requirements and scrutiny, globalization, and other challenges demand any system of internal control to be agile in adapting to the changes in business, operating and regulatory environments."
Source: Executive summary of Integrated Framework of COSO
The increasing requirements of the fiscal, legal and regulatory framework makes it imperative to ensure that the internal controls are well designed and are operating effectively. Such internal controls help in not only the business objectives (of safeguarding the assets, control on operations and optimized business processes) but also in demonstrating the efficiency of the management to shareholders, banks & financial institutions, suppliers, customers and government agencies.
At SKA, we can help in breaking down the operations into various business/operating cycles and further breaking down each of the processes into steps where controls can be placed. Key considerations in the design and implementation of controls;
1. Industry standards and best practices
2. Identifying the appropriate mechanism - IT controls, Manual Vs Automated, Prevent Vs Detect.
3. Cost benefit analysis of the control - What is the risk that the control addresses and impact of such risk against the cost incurred to design and run the control.
4. Scalability of the controls - How can we futureproof the controls?
5. Training of Personnel and Assistance in implementation process.
Enterprise Risk ManagementRisks are those uncertainties which impede the achievement of the objectives of the internal control system. In identification and mitigation of such risks, due cognizance of two aspects need to be looked into - likelihood of such risk and consequence of a risk event.
Risk management is a mechanism to constrain the identified risks to a tolerable level within the risk appetite of the organization. The risk management program entails the following:
a. Determining the risk appetite.
b. Establishing an appropriate internal environment, including a risk management policy and framework.
c. Identifying potential threats to the achievement of its objectives and assessing the risk, i.e., the impact and likelihood of the threat occurring.
d. Undertaking control and other response activities.
e. Communicating information on risks in a consistent manner at all levels in the organization.
f. Centrally monitoring and coordinating the risk management processes and the outcomes, and
g. Providing assurance on the effectiveness with which risks are managed
 Internal Audits
We believe that optimizing Return together with Risk is a key element today in enhancing any company's valuation. We provide Solutions to manage these key risks, which threaten company's returns by conducting effective RISK BASED Internal Audit.
The Risk Based Internal Audit function has changed considerably in the recent past. The Risk Based Internal auditor no longer embarks on a faultfinding mission. The audit methodology has continuously shifted from a review of individual transactions with the objective of detecting errors and omissions, to a review of systems, processes and procedures. In other words, the traditional Risk Based Internal auditor who was always reactive has given way to a proactive advisor helping make the internal controls systems more robust.
We specialize in carrying out such internal audits and typically focus on:
a. Assessment of control environment
b. Systems and procedural controls and
c. Business process improvements
d. Prevention of revenue leakages
e. Identification of cost reduction and cost control areas
f. Enriching the control environment and process efficiency are the key areas.
Forensic Accounting:
As a result of increasing levels of frauds in the foreseen future given the decentralization of businesses and expansion of brands, Forensic Accounting has become imperative. Forensic Accounting not only helps in unearthing fraud or irregularities for assisting litigations but also helps in improving the existing control environment. With the help of suggestions and findings of the Forensic Accounting procedures, the control system can be made robust to prevent instances of fraud. Given the underlying benefits, Forensic Accounting is undertaken in order to have a comprehensive analysis by unearthing prevailing issues or identifying potential issues, if any. It is also expected to provide a host of solutions together with implementation guidance for preventing such occurrence in future.
Srikalyan & Associates possesses experience in the area of forensic accounting & Investigations etc. in corporate sector and in Banking Sector as well. Forensic Accounting involves the application of special skills in accounting, auditing, finance, quantitative methods. Srikalyan & Associates, armed with combination of such skills, is ready to cope with the increasing demand for forensic accountants.
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