[Script Info]
Title: 
[Events]
Format: Layer, Start, End, Style, Name, MarginL, MarginR, MarginV, Effect, Text
Dialogue: 0,0:00:00.24,0:00:03.12,Default,,0000,0000,0000,,What's up audit fans. I'm back and today
Dialogue: 0,0:00:03.12,0:00:04.56,Default,,0000,0000,0000,,we're looking at designing
Dialogue: 0,0:00:04.56,0:00:06.64,Default,,0000,0000,0000,,internal controls. A big thank you to
Dialogue: 0,0:00:06.64,0:00:08.40,Default,,0000,0000,0000,,Charlene who wrote to me
Dialogue: 0,0:00:08.40,0:00:10.48,Default,,0000,0000,0000,,through facebook and said, "Oh look I'd
Dialogue: 0,0:00:10.48,0:00:11.60,Default,,0000,0000,0000,,really love something
Dialogue: 0,0:00:11.60,0:00:14.56,Default,,0000,0000,0000,,about how to design internal controls".
Dialogue: 0,0:00:14.56,0:00:16.00,Default,,0000,0000,0000,,This isn't something that the auditor
Dialogue: 0,0:00:16.00,0:00:16.96,Default,,0000,0000,0000,,would normally
Dialogue: 0,0:00:16.96,0:00:19.04,Default,,0000,0000,0000,,do because when we design internal
Dialogue: 0,0:00:19.04,0:00:20.64,Default,,0000,0000,0000,,controls for our client we
Dialogue: 0,0:00:20.64,0:00:23.12,Default,,0000,0000,0000,,actually create a self-review
Dialogue: 0,0:00:23.12,0:00:24.56,Default,,0000,0000,0000,,independence threat.
Dialogue: 0,0:00:24.56,0:00:26.72,Default,,0000,0000,0000,,But if you're an internal auditor or
Dialogue: 0,0:00:26.72,0:00:28.72,Default,,0000,0000,0000,,you're providing some recommendations
Dialogue: 0,0:00:28.72,0:00:30.24,Default,,0000,0000,0000,,or if you're studying and it's quite a
Dialogue: 0,0:00:30.24,0:00:32.32,Default,,0000,0000,0000,,common question to be asked
Dialogue: 0,0:00:32.32,0:00:34.72,Default,,0000,0000,0000,,what sort of internal controls should be
Dialogue: 0,0:00:34.72,0:00:35.60,Default,,0000,0000,0000,,used
Dialogue: 0,0:00:35.60,0:00:38.08,Default,,0000,0000,0000,,to minimize a particular risk, today I'm
Dialogue: 0,0:00:38.08,0:00:40.00,Default,,0000,0000,0000,,going to address it with a four-step
Dialogue: 0,0:00:40.00,0:00:40.80,Default,,0000,0000,0000,,process.
Dialogue: 0,0:00:40.80,0:00:45.84,Default,,0000,0000,0000,,Let's get into it.
Dialogue: 0,0:00:46.22,0:00:52.07,Default,,0000,0000,0000,,[Music]
Dialogue: 0,0:00:54.48,0:00:56.56,Default,,0000,0000,0000,,Hi and welcome to AmandaLovesToAudit.
Dialogue: 0,0:00:56.56,0:00:58.32,Default,,0000,0000,0000,,My name is Amanda, I do love
Dialogue: 0,0:00:58.32,0:01:01.52,Default,,0000,0000,0000,,audit, and I'm really excited to be
Dialogue: 0,0:01:01.52,0:01:04.16,Default,,0000,0000,0000,,here back again on my YouTube channel.
Dialogue: 0,0:01:04.16,0:01:05.20,Default,,0000,0000,0000,,We're just starting our
Dialogue: 0,0:01:05.20,0:01:07.12,Default,,0000,0000,0000,,university semester here in Australia so
Dialogue: 0,0:01:07.12,0:01:08.96,Default,,0000,0000,0000,,it's full steam ahead for me,
Dialogue: 0,0:01:08.96,0:01:10.72,Default,,0000,0000,0000,,really, really busy. But I wanted to give
Dialogue: 0,0:01:10.72,0:01:12.00,Default,,0000,0000,0000,,a shout out to
Dialogue: 0,0:01:12.00,0:01:15.20,Default,,0000,0000,0000,,all of my returning viewers from places
Dialogue: 0,0:01:15.20,0:01:15.76,Default,,0000,0000,0000,,like
Dialogue: 0,0:01:15.76,0:01:18.32,Default,,0000,0000,0000,,Canada, Indonesia, Namibia, Nigeria, South
Dialogue: 0,0:01:18.32,0:01:19.36,Default,,0000,0000,0000,,Africa, USA,
Dialogue: 0,0:01:19.36,0:01:22.48,Default,,0000,0000,0000,,Germany, Uganda, did I say Uganda twice?
Dialogue: 0,0:01:22.48,0:01:22.88,Default,,0000,0000,0000,,No.
Dialogue: 0,0:01:22.88,0:01:25.76,Default,,0000,0000,0000,,Ghana. It's really amazing. Somebody in
Dialogue: 0,0:01:25.76,0:01:28.00,Default,,0000,0000,0000,,the comments asked if I'm Malaysian
Dialogue: 0,0:01:28.00,0:01:30.56,Default,,0000,0000,0000,,and I'm not. So my parents are both from
Dialogue: 0,0:01:30.56,0:01:31.44,Default,,0000,0000,0000,,China
Dialogue: 0,0:01:31.44,0:01:34.56,Default,,0000,0000,0000,,in the Guangzhou region of China. I
Dialogue: 0,0:01:34.56,0:01:37.44,Default,,0000,0000,0000,,don't speak any Chinese. So my parents
Dialogue: 0,0:01:37.44,0:01:38.80,Default,,0000,0000,0000,,came here, my mom came here when she was
Dialogue: 0,0:01:38.80,0:01:39.68,Default,,0000,0000,0000,,five years old,
Dialogue: 0,0:01:39.68,0:01:43.12,Default,,0000,0000,0000,,my dad came in his teenage years.
Dialogue: 0,0:01:43.12,0:01:46.40,Default,,0000,0000,0000,,And when my mom was growing up, she
Dialogue: 0,0:01:46.40,0:01:48.56,Default,,0000,0000,0000,,went to kindergarten not knowing any
Dialogue: 0,0:01:48.56,0:01:49.52,Default,,0000,0000,0000,,English,
Dialogue: 0,0:01:49.52,0:01:51.76,Default,,0000,0000,0000,,so when she talked with an accent she
Dialogue: 0,0:01:51.76,0:01:54.00,Default,,0000,0000,0000,,received a lot of bullying,
Dialogue: 0,0:01:54.00,0:01:55.76,Default,,0000,0000,0000,,even then you know a lot of racism
Dialogue: 0,0:01:55.76,0:01:57.28,Default,,0000,0000,0000,,against Asians. So
Dialogue: 0,0:01:57.28,0:02:00.08,Default,,0000,0000,0000,,when she had kids, and we were the only
Dialogue: 0,0:02:00.08,0:02:01.84,Default,,0000,0000,0000,,Asian kids in our school,
Dialogue: 0,0:02:01.84,0:02:04.16,Default,,0000,0000,0000,,she said I want you to sound Aussie. I
Dialogue: 0,0:02:04.16,0:02:05.92,Default,,0000,0000,0000,,want you to be able to blend in so that
Dialogue: 0,0:02:05.92,0:02:08.56,Default,,0000,0000,0000,,if you can sound like everybody else,
Dialogue: 0,0:02:08.56,0:02:11.44,Default,,0000,0000,0000,,then hopefully you won't experience the
Dialogue: 0,0:02:11.44,0:02:12.08,Default,,0000,0000,0000,,same
Dialogue: 0,0:02:12.08,0:02:15.28,Default,,0000,0000,0000,,levels of racism and discrimination
Dialogue: 0,0:02:15.28,0:02:18.24,Default,,0000,0000,0000,,that she experienced as a child growing
Dialogue: 0,0:02:18.24,0:02:19.04,Default,,0000,0000,0000,,up.
Dialogue: 0,0:02:19.04,0:02:21.76,Default,,0000,0000,0000,,And so when I was, I think three or four
Dialogue: 0,0:02:21.76,0:02:22.08,Default,,0000,0000,0000,,years
Dialogue: 0,0:02:22.08,0:02:25.52,Default,,0000,0000,0000,,old, my mother said to my grandmother,
Dialogue: 0,0:02:25.52,0:02:27.28,Default,,0000,0000,0000,,who she looked after us a lot. She
Dialogue: 0,0:02:27.28,0:02:29.12,Default,,0000,0000,0000,,said look that's it, we're not speaking
Dialogue: 0,0:02:29.12,0:02:30.48,Default,,0000,0000,0000,,any Chinese anymore,
Dialogue: 0,0:02:30.48,0:02:33.52,Default,,0000,0000,0000,,English only. So I really only know
Dialogue: 0,0:02:33.52,0:02:34.64,Default,,0000,0000,0000,,enough
Dialogue: 0,0:02:34.64,0:02:37.60,Default,,0000,0000,0000,,Cantonese to get by at Yum Cha. I know
Dialogue: 0,0:02:37.60,0:02:38.56,Default,,0000,0000,0000,,that I want to eat
Dialogue: 0,0:02:38.56,0:02:42.32,Default,,0000,0000,0000,,ha gao, cha siu bao,
Dialogue: 0,0:02:42.32,0:02:45.52,Default,,0000,0000,0000,,pai gwat, dan tats. I know that I don't want
Dialogue: 0,0:02:45.52,0:02:47.36,Default,,0000,0000,0000,,to eat the fung jao which is
Dialogue: 0,0:02:47.36,0:02:50.24,Default,,0000,0000,0000,,the chicken foot, but really that's the
Dialogue: 0,0:02:50.24,0:02:51.36,Default,,0000,0000,0000,,extent of
Dialogue: 0,0:02:51.36,0:02:54.16,Default,,0000,0000,0000,,my Chinese language skills, so that's
Dialogue: 0,0:02:54.16,0:02:55.28,Default,,0000,0000,0000,,enough about me.
Dialogue: 0,0:02:55.28,0:02:59.28,Default,,0000,0000,0000,,I've been a tiny bit busy recently,
Dialogue: 0,0:02:59.28,0:03:02.24,Default,,0000,0000,0000,,I've just won the national teaching
Dialogue: 0,0:03:02.24,0:03:03.36,Default,,0000,0000,0000,,excellence award
Dialogue: 0,0:03:03.36,0:03:05.84,Default,,0000,0000,0000,,for the business, economics law and
Dialogue: 0,0:03:05.84,0:03:06.56,Default,,0000,0000,0000,,related
Dialogue: 0,0:03:06.56,0:03:09.12,Default,,0000,0000,0000,,category. I'll have a video more on that
Dialogue: 0,0:03:09.12,0:03:10.56,Default,,0000,0000,0000,,a little bit later because I'm doing a
Dialogue: 0,0:03:10.56,0:03:11.68,Default,,0000,0000,0000,,big speech,
Dialogue: 0,0:03:11.68,0:03:13.12,Default,,0000,0000,0000,,a whole lot of other things, so I was
Dialogue: 0,0:03:13.12,0:03:15.04,Default,,0000,0000,0000,,really excited to
Dialogue: 0,0:03:15.04,0:03:18.08,Default,,0000,0000,0000,,receive that. And all of you out there in
Dialogue: 0,0:03:18.08,0:03:19.92,Default,,0000,0000,0000,,YouTube land were a really big part of
Dialogue: 0,0:03:19.92,0:03:21.04,Default,,0000,0000,0000,,that as well, so
Dialogue: 0,0:03:21.04,0:03:23.04,Default,,0000,0000,0000,,I did a survey a little while ago asking
Dialogue: 0,0:03:23.04,0:03:24.56,Default,,0000,0000,0000,,about whether you thought the resources
Dialogue: 0,0:03:24.56,0:03:26.32,Default,,0000,0000,0000,,were high quality
Dialogue: 0,0:03:26.32,0:03:28.16,Default,,0000,0000,0000,,and some feedback and a lot of those
Dialogue: 0,0:03:28.16,0:03:29.92,Default,,0000,0000,0000,,quotes and a lot of those
Dialogue: 0,0:03:29.92,0:03:31.76,Default,,0000,0000,0000,,pieces of information made it into my
Dialogue: 0,0:03:31.76,0:03:33.60,Default,,0000,0000,0000,,application so thank you
Dialogue: 0,0:03:33.60,0:03:36.24,Default,,0000,0000,0000,,so much to everybody that's out there
Dialogue: 0,0:03:36.24,0:03:38.00,Default,,0000,0000,0000,,that filled in that survey.
Dialogue: 0,0:03:38.00,0:03:41.20,Default,,0000,0000,0000,,For everyone who's new, welcome! I love
Dialogue: 0,0:03:41.20,0:03:41.76,Default,,0000,0000,0000,,audit,
Dialogue: 0,0:03:41.76,0:03:43.92,Default,,0000,0000,0000,,and you'll hear that, you'll see that in
Dialogue: 0,0:03:43.92,0:03:45.84,Default,,0000,0000,0000,,everything that we do. So I'm just going
Dialogue: 0,0:03:45.84,0:03:48.64,Default,,0000,0000,0000,,to switch camera positions a little bit
Dialogue: 0,0:03:48.64,0:03:50.96,Default,,0000,0000,0000,,so that then I can have my writing
Dialogue: 0,0:03:50.96,0:03:53.52,Default,,0000,0000,0000,,coming up here so just hang on.
Dialogue: 0,0:03:53.52,0:03:55.68,Default,,0000,0000,0000,,So today we're getting into how do I
Dialogue: 0,0:03:55.68,0:03:57.60,Default,,0000,0000,0000,,design an internal control? It's a really
Dialogue: 0,0:03:57.60,0:03:58.72,Default,,0000,0000,0000,,common exam
Dialogue: 0,0:03:58.72,0:04:00.96,Default,,0000,0000,0000,,question just to see that you can do the
Dialogue: 0,0:04:00.96,0:04:02.16,Default,,0000,0000,0000,,other perspective.
Dialogue: 0,0:04:02.16,0:04:03.52,Default,,0000,0000,0000,,And if you're studying management
Dialogue: 0,0:04:03.52,0:04:05.92,Default,,0000,0000,0000,,accounting, how to design an internal
Dialogue: 0,0:04:05.92,0:04:07.52,Default,,0000,0000,0000,,control can be really important because
Dialogue: 0,0:04:07.52,0:04:09.20,Default,,0000,0000,0000,,management accounting is about,
Dialogue: 0,0:04:09.20,0:04:10.64,Default,,0000,0000,0000,,number one doing accounting from within
Dialogue: 0,0:04:10.64,0:04:12.40,Default,,0000,0000,0000,,the firm, but also
Dialogue: 0,0:04:12.40,0:04:14.96,Default,,0000,0000,0000,,designing the management systems that
Dialogue: 0,0:04:14.96,0:04:15.60,Default,,0000,0000,0000,,make sure that
Dialogue: 0,0:04:15.60,0:04:18.88,Default,,0000,0000,0000,,everyone in the organization is working
Dialogue: 0,0:04:18.88,0:04:22.88,Default,,0000,0000,0000,,together, moving in the same direction.
Dialogue: 0,0:04:22.88,0:04:24.96,Default,,0000,0000,0000,,There are going to be four steps in our
Dialogue: 0,0:04:24.96,0:04:27.28,Default,,0000,0000,0000,,process. So step number one
Dialogue: 0,0:04:27.28,0:04:32.48,Default,,0000,0000,0000,,is going to be about identifying
Dialogue: 0,0:04:32.48,0:04:35.92,Default,,0000,0000,0000,,the potential misstatement.
Dialogue: 0,0:04:37.36,0:04:41.04,Default,,0000,0000,0000,,Now the reason that we need to do this
Dialogue: 0,0:04:41.04,0:04:47.20,Default,,0000,0000,0000,,is that remember a control is a response
Dialogue: 0,0:04:47.44,0:04:49.60,Default,,0000,0000,0000,,to a risk. So essentially we have to
Dialogue: 0,0:04:49.60,0:04:51.52,Default,,0000,0000,0000,,identify the risk. What is the potential
Dialogue: 0,0:04:51.52,0:04:52.64,Default,,0000,0000,0000,,misstatement,
Dialogue: 0,0:04:52.64,0:04:55.76,Default,,0000,0000,0000,,the potential error that could occur? So
Dialogue: 0,0:04:55.76,0:04:56.16,Default,,0000,0000,0000,,that's
Dialogue: 0,0:04:56.16,0:05:00.56,Default,,0000,0000,0000,,step number one. Then step number two,
Dialogue: 0,0:05:00.56,0:05:01.84,Default,,0000,0000,0000,,And I'm going to just move that up a
Dialogue: 0,0:05:01.84,0:05:03.68,Default,,0000,0000,0000,,little bit, is
Dialogue: 0,0:05:03.68,0:05:06.24,Default,,0000,0000,0000,,we have to ask ourselves the question, do
Dialogue: 0,0:05:06.24,0:05:07.20,Default,,0000,0000,0000,,we want to
Dialogue: 0,0:05:07.20,0:05:11.28,Default,,0000,0000,0000,,prevent the issue from happening or
Dialogue: 0,0:05:11.28,0:05:14.48,Default,,0000,0000,0000,,are we trying to detect an error
Dialogue: 0,0:05:14.48,0:05:17.60,Default,,0000,0000,0000,,afterwards? So in a lot of circumstances
Dialogue: 0,0:05:17.60,0:05:20.56,Default,,0000,0000,0000,,where it's a control around a process,
Dialogue: 0,0:05:20.56,0:05:22.08,Default,,0000,0000,0000,,I want to try and prevent, right?
Dialogue: 0,0:05:22.08,0:05:24.00,Default,,0000,0000,0000,,Prevention is always better than a cure.
Dialogue: 0,0:05:24.00,0:05:24.96,Default,,0000,0000,0000,,So you have to think am I going to
Dialogue: 0,0:05:24.96,0:05:25.92,Default,,0000,0000,0000,,prevent
Dialogue: 0,0:05:25.92,0:05:28.88,Default,,0000,0000,0000,,or do I want to detect. Now detecting is
Dialogue: 0,0:05:28.88,0:05:29.76,Default,,0000,0000,0000,,about
Dialogue: 0,0:05:29.76,0:05:31.20,Default,,0000,0000,0000,,picking up that there's a mistake
Dialogue: 0,0:05:31.20,0:05:34.32,Default,,0000,0000,0000,,perhaps after a process has happened.
Dialogue: 0,0:05:34.32,0:05:36.24,Default,,0000,0000,0000,,So you have a manufacturing process,
Dialogue: 0,0:05:36.24,0:05:39.04,Default,,0000,0000,0000,,you're making a good and then
Dialogue: 0,0:05:39.04,0:05:41.60,Default,,0000,0000,0000,,there is quality control. So you know you
Dialogue: 0,0:05:41.60,0:05:42.88,Default,,0000,0000,0000,,have everything in the process, the
Dialogue: 0,0:05:42.88,0:05:44.48,Default,,0000,0000,0000,,machines doing the right things, checking
Dialogue: 0,0:05:44.48,0:05:45.84,Default,,0000,0000,0000,,their parts.
Dialogue: 0,0:05:45.84,0:05:48.64,Default,,0000,0000,0000,,And the quality control at the end is to
Dialogue: 0,0:05:48.64,0:05:49.44,Default,,0000,0000,0000,,make sure
Dialogue: 0,0:05:49.44,0:05:51.92,Default,,0000,0000,0000,,that you detect any issues before they
Dialogue: 0,0:05:51.92,0:05:53.68,Default,,0000,0000,0000,,go out, you know the product goes out to
Dialogue: 0,0:05:53.68,0:05:55.36,Default,,0000,0000,0000,,the customer. So you have to think
Dialogue: 0,0:05:55.36,0:05:57.12,Default,,0000,0000,0000,,do I want to try and prevent or do I
Dialogue: 0,0:05:57.12,0:05:58.40,Default,,0000,0000,0000,,want to try and detect.
Dialogue: 0,0:05:58.40,0:06:00.08,Default,,0000,0000,0000,,Now I'm going to do this with a live
Dialogue: 0,0:06:00.08,0:06:01.76,Default,,0000,0000,0000,,example as well after, so I'm just going
Dialogue: 0,0:06:01.76,0:06:03.44,Default,,0000,0000,0000,,to go through the theory first.
Dialogue: 0,0:06:03.44,0:06:06.40,Default,,0000,0000,0000,,So part one, identify the potential
Dialogue: 0,0:06:06.40,0:06:08.64,Default,,0000,0000,0000,,misstatement, so what is the risk?
Dialogue: 0,0:06:08.64,0:06:12.16,Default,,0000,0000,0000,,Part two, am I thinking about preventing
Dialogue: 0,0:06:12.16,0:06:13.92,Default,,0000,0000,0000,,or detecting?
Dialogue: 0,0:06:13.92,0:06:19.52,Default,,0000,0000,0000,,Then, you actually need to design
Dialogue: 0,0:06:19.60,0:06:24.24,Default,,0000,0000,0000,,an effective
Dialogue: 0,0:06:25.04,0:06:28.08,Default,,0000,0000,0000,,and efficient
Dialogue: 0,0:06:30.96,0:06:33.84,Default,,0000,0000,0000,,internal control. Now what do I mean by
Dialogue: 0,0:06:33.84,0:06:34.48,Default,,0000,0000,0000,,effective?
Dialogue: 0,0:06:34.48,0:06:36.56,Default,,0000,0000,0000,,Effective, I mean, that it has to work. It
Dialogue: 0,0:06:36.56,0:06:38.16,Default,,0000,0000,0000,,has to prevent
Dialogue: 0,0:06:38.16,0:06:41.20,Default,,0000,0000,0000,,the error that you've got. And when I say
Dialogue: 0,0:06:41.20,0:06:42.24,Default,,0000,0000,0000,,efficient,
Dialogue: 0,0:06:42.24,0:06:44.80,Default,,0000,0000,0000,,I mean that efficient is it's not going
Dialogue: 0,0:06:44.80,0:06:46.48,Default,,0000,0000,0000,,to cost us too much resources
Dialogue: 0,0:06:46.48,0:06:48.56,Default,,0000,0000,0000,,because remember when it comes to
Dialogue: 0,0:06:48.56,0:06:50.08,Default,,0000,0000,0000,,internal controls
Dialogue: 0,0:06:50.08,0:06:52.72,Default,,0000,0000,0000,,you have to think about the cost versus
Dialogue: 0,0:06:52.72,0:06:54.32,Default,,0000,0000,0000,,the benefit.
Dialogue: 0,0:06:54.32,0:06:56.72,Default,,0000,0000,0000,,So, in a supermarket, to make sure that
Dialogue: 0,0:06:56.72,0:06:57.60,Default,,0000,0000,0000,,people don't
Dialogue: 0,0:06:57.60,0:07:00.56,Default,,0000,0000,0000,,steal from a supermarket, I could make
Dialogue: 0,0:07:00.56,0:07:02.40,Default,,0000,0000,0000,,every single person have to go through
Dialogue: 0,0:07:02.40,0:07:03.20,Default,,0000,0000,0000,,an airport
Dialogue: 0,0:07:03.20,0:07:05.28,Default,,0000,0000,0000,,x-ray screening type of thing when they
Dialogue: 0,0:07:05.28,0:07:06.64,Default,,0000,0000,0000,,leave the store.
Dialogue: 0,0:07:06.64,0:07:09.92,Default,,0000,0000,0000,,That would be very, very beneficial,
Dialogue: 0,0:07:09.92,0:07:13.20,Default,,0000,0000,0000,,however, it would cost a lot in terms of
Dialogue: 0,0:07:13.20,0:07:13.76,Default,,0000,0000,0000,,time
Dialogue: 0,0:07:13.76,0:07:18.24,Default,,0000,0000,0000,,for my customers, effort
Dialogue: 0,0:07:18.24,0:07:21.68,Default,,0000,0000,0000,,to get it done, and also
Dialogue: 0,0:07:21.68,0:07:24.96,Default,,0000,0000,0000,,it would be really expensive, okay?
Dialogue: 0,0:07:24.96,0:07:28.16,Default,,0000,0000,0000,,So I need to balance the benefit
Dialogue: 0,0:07:28.16,0:07:29.84,Default,,0000,0000,0000,,of preventing or detecting a
Dialogue: 0,0:07:29.84,0:07:31.84,Default,,0000,0000,0000,,misstatement with the cost.
Dialogue: 0,0:07:31.84,0:07:32.88,Default,,0000,0000,0000,,So you got to think about that in
Dialogue: 0,0:07:32.88,0:07:35.12,Default,,0000,0000,0000,,your design. Now
Dialogue: 0,0:07:35.12,0:07:36.96,Default,,0000,0000,0000,,also, when you're thinking about the
Dialogue: 0,0:07:36.96,0:07:39.76,Default,,0000,0000,0000,,design, you have to consider whether you
Dialogue: 0,0:07:39.76,0:07:40.80,Default,,0000,0000,0000,,want
Dialogue: 0,0:07:40.80,0:07:44.08,Default,,0000,0000,0000,,a manual control, so somebody physically
Dialogue: 0,0:07:44.08,0:07:47.76,Default,,0000,0000,0000,,doing something, versus some sort of
Dialogue: 0,0:07:47.76,0:07:50.80,Default,,0000,0000,0000,,automated or
Dialogue: 0,0:07:50.80,0:07:54.64,Default,,0000,0000,0000,,IT or systems
Dialogue: 0,0:07:55.92,0:07:58.40,Default,,0000,0000,0000,,based solution, okay? Because if you do
Dialogue: 0,0:07:58.40,0:07:59.20,Default,,0000,0000,0000,,have
Dialogue: 0,0:07:59.20,0:08:00.72,Default,,0000,0000,0000,,something that needs a manual control,
Dialogue: 0,0:08:00.72,0:08:02.80,Default,,0000,0000,0000,,remember humans can make mistakes.
Dialogue: 0,0:08:02.80,0:08:04.64,Default,,0000,0000,0000,,With an automated system you've got to
Dialogue: 0,0:08:04.64,0:08:06.32,Default,,0000,0000,0000,,be really careful because
Dialogue: 0,0:08:06.32,0:08:07.84,Default,,0000,0000,0000,,if you don't program the system
Dialogue: 0,0:08:07.84,0:08:09.84,Default,,0000,0000,0000,,correctly, it can still make a mistake so
Dialogue: 0,0:08:09.84,0:08:11.20,Default,,0000,0000,0000,,if you don't program it correctly it
Dialogue: 0,0:08:11.20,0:08:12.00,Default,,0000,0000,0000,,could still
Dialogue: 0,0:08:12.00,0:08:15.04,Default,,0000,0000,0000,,go wrong. So our
Dialogue: 0,0:08:15.04,0:08:18.24,Default,,0000,0000,0000,,fourth thing that we want to think about
Dialogue: 0,0:08:18.24,0:08:21.12,Default,,0000,0000,0000,,is monitoring,
Dialogue: 0,0:08:22.08,0:08:24.48,Default,,0000,0000,0000,,all right? Are we doing something to
Dialogue: 0,0:08:24.48,0:08:25.60,Default,,0000,0000,0000,,check the control?
Dialogue: 0,0:08:25.60,0:08:28.24,Default,,0000,0000,0000,,Essentially we need to make sure that we
Dialogue: 0,0:08:28.24,0:08:29.20,Default,,0000,0000,0000,,are
Dialogue: 0,0:08:29.20,0:08:32.24,Default,,0000,0000,0000,,checking the
Dialogue: 0,0:08:32.24,0:08:35.04,Default,,0000,0000,0000,,operation
Dialogue: 0,0:08:36.48,0:08:40.64,Default,,0000,0000,0000,,of the control.
Dialogue: 0,0:08:40.64,0:08:43.04,Default,,0000,0000,0000,,Okay, a really great example of that
Dialogue: 0,0:08:43.04,0:08:44.80,Default,,0000,0000,0000,,monitoring aspect
Dialogue: 0,0:08:44.80,0:08:48.08,Default,,0000,0000,0000,,is if we have a bank and you go with
Dialogue: 0,0:08:48.08,0:08:50.16,Default,,0000,0000,0000,,your card,
Dialogue: 0,0:08:50.16,0:08:54.16,Default,,0000,0000,0000,,and I have one in my pocket actually,
Dialogue: 0,0:08:54.16,0:08:57.68,Default,,0000,0000,0000,,so here's my card for my bank account.
Dialogue: 0,0:08:57.68,0:09:00.64,Default,,0000,0000,0000,,I go to the ATM, I put it in, I get the
Dialogue: 0,0:09:00.64,0:09:01.44,Default,,0000,0000,0000,,pin wrong.
Dialogue: 0,0:09:01.44,0:09:03.84,Default,,0000,0000,0000,,Oh okay, that's the wrong pin. I remember
Dialogue: 0,0:09:03.84,0:09:05.44,Default,,0000,0000,0000,,the right pin, I put it in.
Dialogue: 0,0:09:05.44,0:09:08.24,Default,,0000,0000,0000,,The bank at the end of the day, will get
Dialogue: 0,0:09:08.24,0:09:09.04,Default,,0000,0000,0000,,a report
Dialogue: 0,0:09:09.04,0:09:10.96,Default,,0000,0000,0000,,that says what are all the cards where
Dialogue: 0,0:09:10.96,0:09:12.64,Default,,0000,0000,0000,,an incorrect pin was entered
Dialogue: 0,0:09:12.64,0:09:15.52,Default,,0000,0000,0000,,or perhaps an incorrect pin was entered
Dialogue: 0,0:09:15.52,0:09:16.24,Default,,0000,0000,0000,,more than
Dialogue: 0,0:09:16.24,0:09:19.44,Default,,0000,0000,0000,,three times or we actually chewed up the
Dialogue: 0,0:09:19.44,0:09:20.24,Default,,0000,0000,0000,,card.
Dialogue: 0,0:09:20.24,0:09:22.00,Default,,0000,0000,0000,,So we want to check that the control is
Dialogue: 0,0:09:22.00,0:09:23.84,Default,,0000,0000,0000,,operating effectively. We want to check
Dialogue: 0,0:09:23.84,0:09:25.36,Default,,0000,0000,0000,,that the operation of the control is
Dialogue: 0,0:09:25.36,0:09:27.12,Default,,0000,0000,0000,,working because remember,
Dialogue: 0,0:09:27.12,0:09:31.84,Default,,0000,0000,0000,,we know that when the control
Dialogue: 0,0:09:31.84,0:09:34.80,Default,,0000,0000,0000,,stops working,
Dialogue: 0,0:09:34.88,0:09:38.32,Default,,0000,0000,0000,,what happens? My regular viewers will
Dialogue: 0,0:09:38.32,0:09:40.80,Default,,0000,0000,0000,,know this. When the control stops working
Dialogue: 0,0:09:40.80,0:09:44.24,Default,,0000,0000,0000,,then we have an increased risk
Dialogue: 0,0:09:44.24,0:09:51.84,Default,,0000,0000,0000,,of errors and misstatements,
Dialogue: 0,0:09:52.08,0:09:53.44,Default,,0000,0000,0000,,all right? And we definitely don't want
Dialogue: 0,0:09:53.44,0:09:55.28,Default,,0000,0000,0000,,that. We don't want to have misstatements
Dialogue: 0,0:09:55.28,0:09:55.68,Default,,0000,0000,0000,,going
Dialogue: 0,0:09:55.68,0:09:59.04,Default,,0000,0000,0000,,into the financial records and
Dialogue: 0,0:09:59.04,0:09:59.36,Default,,0000,0000,0000,,the
Dialogue: 0,0:09:59.36,0:10:02.16,Default,,0000,0000,0000,,accounting of the firm. So to recap,
Dialogue: 0,0:10:02.16,0:10:04.48,Default,,0000,0000,0000,,I'm going to scroll quickly back up.
Dialogue: 0,0:10:04.48,0:10:06.88,Default,,0000,0000,0000,,Number one, identify the potential
Dialogue: 0,0:10:06.88,0:10:08.08,Default,,0000,0000,0000,,misstatements.
Dialogue: 0,0:10:08.08,0:10:10.00,Default,,0000,0000,0000,,Number two, decide whether you want to
Dialogue: 0,0:10:10.00,0:10:11.68,Default,,0000,0000,0000,,prevent or detect.
Dialogue: 0,0:10:11.68,0:10:15.60,Default,,0000,0000,0000,,Number three, design an effective
Dialogue: 0,0:10:15.60,0:10:17.52,Default,,0000,0000,0000,,and efficient internal control, thinking
Dialogue: 0,0:10:17.52,0:10:19.68,Default,,0000,0000,0000,,about the cost versus the benefit.
Dialogue: 0,0:10:19.68,0:10:22.00,Default,,0000,0000,0000,,That cost could be the time it takes, the
Dialogue: 0,0:10:22.00,0:10:22.88,Default,,0000,0000,0000,,dollars
Dialogue: 0,0:10:22.88,0:10:25.04,Default,,0000,0000,0000,,to actually implement it, the effort it
Dialogue: 0,0:10:25.04,0:10:26.16,Default,,0000,0000,0000,,might take.
Dialogue: 0,0:10:26.16,0:10:28.08,Default,,0000,0000,0000,,Think about whether you want manual or
Dialogue: 0,0:10:28.08,0:10:30.72,Default,,0000,0000,0000,,automated systems.
Dialogue: 0,0:10:30.72,0:10:33.04,Default,,0000,0000,0000,,And then consider the monitoring. What
Dialogue: 0,0:10:33.04,0:10:35.76,Default,,0000,0000,0000,,are we doing to monitor this control
Dialogue: 0,0:10:35.76,0:10:37.52,Default,,0000,0000,0000,,to make sure that it's always working? Is
Dialogue: 0,0:10:37.52,0:10:39.04,Default,,0000,0000,0000,,it if something goes wrong a system
Dialogue: 0,0:10:39.04,0:10:40.56,Default,,0000,0000,0000,,flags with us.
Dialogue: 0,0:10:40.56,0:10:44.24,Default,,0000,0000,0000,,So now let's look at a practical example.
Dialogue: 0,0:10:44.24,0:10:46.32,Default,,0000,0000,0000,,So in my practical example, I'm going to
Dialogue: 0,0:10:46.32,0:10:48.00,Default,,0000,0000,0000,,think about
Dialogue: 0,0:10:48.00,0:10:51.12,Default,,0000,0000,0000,,a retail operation. And I'm using a
Dialogue: 0,0:10:51.12,0:10:52.32,Default,,0000,0000,0000,,retail operation
Dialogue: 0,0:10:52.32,0:10:55.04,Default,,0000,0000,0000,,because it's something that we can
Dialogue: 0,0:10:55.04,0:10:56.80,Default,,0000,0000,0000,,imagine in our minds, we've all been
Dialogue: 0,0:10:56.80,0:10:59.44,Default,,0000,0000,0000,,shopping to a store. Now I need to find
Dialogue: 0,0:10:59.44,0:11:00.64,Default,,0000,0000,0000,,something, oh let's just, I have a
Dialogue: 0,0:11:00.64,0:11:01.92,Default,,0000,0000,0000,,notebook here.
Dialogue: 0,0:11:01.92,0:11:05.44,Default,,0000,0000,0000,,So a big thank you to Microsoft for
Dialogue: 0,0:11:05.44,0:11:05.76,Default,,0000,0000,0000,,
Dialogue: 0,0:11:05.76,0:11:07.04,Default,,0000,0000,0000,,they sent me a notebook the other day.
Dialogue: 0,0:11:07.04,0:11:08.96,Default,,0000,0000,0000,,I'm an MIE expert which is a Microsoft
Dialogue: 0,0:11:08.96,0:11:09.92,Default,,0000,0000,0000,,Innovative
Dialogue: 0,0:11:09.92,0:11:12.32,Default,,0000,0000,0000,,Educator expert and I got a little
Dialogue: 0,0:11:12.32,0:11:13.92,Default,,0000,0000,0000,,goodie bag from them and it includes a notebook.
Dialogue: 0,0:11:13.92,0:11:14.88,Default,,0000,0000,0000,,So say we're
Dialogue: 0,0:11:14.88,0:11:17.92,Default,,0000,0000,0000,,a retail operation and we're selling
Dialogue: 0,0:11:17.92,0:11:19.60,Default,,0000,0000,0000,,fancy notebooks. So let's say this is
Dialogue: 0,0:11:19.60,0:11:21.20,Default,,0000,0000,0000,,like, you know, it's leather and it's
Dialogue: 0,0:11:21.20,0:11:22.08,Default,,0000,0000,0000,,really fancy.
Dialogue: 0,0:11:22.08,0:11:24.72,Default,,0000,0000,0000,,So what is the risk? So let's start with
Dialogue: 0,0:11:24.72,0:11:26.40,Default,,0000,0000,0000,,step one.
Dialogue: 0,0:11:26.40,0:11:30.08,Default,,0000,0000,0000,,The risk is going to be
Dialogue: 0,0:11:30.08,0:11:33.20,Default,,0000,0000,0000,,theft of inventory,
Dialogue: 0,0:11:34.08,0:11:35.52,Default,,0000,0000,0000,,all right? If people steal the inventory
Dialogue: 0,0:11:35.52,0:11:36.80,Default,,0000,0000,0000,,they're not buying it and we're not
Dialogue: 0,0:11:36.80,0:11:39.04,Default,,0000,0000,0000,,making revenue, so we've got our risk
Dialogue: 0,0:11:39.04,0:11:42.56,Default,,0000,0000,0000,,of misstatement, is a theft of inventory.
Dialogue: 0,0:11:42.56,0:11:44.96,Default,,0000,0000,0000,,And we might also have the, so let's talk
Dialogue: 0,0:11:44.96,0:11:47.28,Default,,0000,0000,0000,,about the theft of inventory risk.
Dialogue: 0,0:11:47.28,0:11:51.68,Default,,0000,0000,0000,,So then I have to think prevent
Dialogue: 0,0:11:51.68,0:11:55.12,Default,,0000,0000,0000,,or detect so that's P or D. In this one, I
Dialogue: 0,0:11:55.12,0:11:56.00,Default,,0000,0000,0000,,definitely want
Dialogue: 0,0:11:56.00,0:11:59.04,Default,,0000,0000,0000,,to try and prevent theft, okay? I don't
Dialogue: 0,0:11:59.04,0:12:00.32,Default,,0000,0000,0000,,want to detect the theft
Dialogue: 0,0:12:00.32,0:12:01.76,Default,,0000,0000,0000,,after it's happened, I want to try and
Dialogue: 0,0:12:01.76,0:12:04.16,Default,,0000,0000,0000,,prevent people from stealing
Dialogue: 0,0:12:04.16,0:12:07.60,Default,,0000,0000,0000,,my item from my store, so prevent or
Dialogue: 0,0:12:07.60,0:12:08.40,Default,,0000,0000,0000,,detect.
Dialogue: 0,0:12:08.40,0:12:11.84,Default,,0000,0000,0000,,Now number three comes the actual part
Dialogue: 0,0:12:11.84,0:12:12.32,Default,,0000,0000,0000,,of
Dialogue: 0,0:12:12.32,0:12:15.20,Default,,0000,0000,0000,,designing the internal control. Well I
Dialogue: 0,0:12:15.20,0:12:16.08,Default,,0000,0000,0000,,want something
Dialogue: 0,0:12:16.08,0:12:18.40,Default,,0000,0000,0000,,that will stop people from stealing my
Dialogue: 0,0:12:18.40,0:12:20.00,Default,,0000,0000,0000,,product. I got a couple of different
Dialogue: 0,0:12:20.00,0:12:21.20,Default,,0000,0000,0000,,options
Dialogue: 0,0:12:21.20,0:12:24.08,Default,,0000,0000,0000,,here. And it might be that I might need
Dialogue: 0,0:12:24.08,0:12:26.64,Default,,0000,0000,0000,,to have multiple things in place.
Dialogue: 0,0:12:26.64,0:12:30.80,Default,,0000,0000,0000,,I could have security cameras,
Dialogue: 0,0:12:30.80,0:12:32.72,Default,,0000,0000,0000,,all right? But if i have security cameras
Dialogue: 0,0:12:32.72,0:12:34.16,Default,,0000,0000,0000,,someone's going to need to be watching
Dialogue: 0,0:12:34.16,0:12:36.56,Default,,0000,0000,0000,,them, so if i have security cameras
Dialogue: 0,0:12:36.56,0:12:40.56,Default,,0000,0000,0000,,that could be a deterrent potentially.
Dialogue: 0,0:12:40.56,0:12:46.08,Default,,0000,0000,0000,,I could also have RFID
Dialogue: 0,0:12:46.08,0:12:48.72,Default,,0000,0000,0000,,stickers
Dialogue: 0,0:12:49.36,0:12:53.52,Default,,0000,0000,0000,,on the inventory,
Dialogue: 0,0:12:53.52,0:12:55.92,Default,,0000,0000,0000,,all right? So an RFID sticker or one of
Dialogue: 0,0:12:55.92,0:12:57.76,Default,,0000,0000,0000,,those security tags, so
Dialogue: 0,0:12:57.76,0:12:59.44,Default,,0000,0000,0000,,often it could be like a little sticker
Dialogue: 0,0:12:59.44,0:13:01.04,Default,,0000,0000,0000,,that's placed on an individual item or
Dialogue: 0,0:13:01.04,0:13:03.04,Default,,0000,0000,0000,,it could be a big removable tag. So if
Dialogue: 0,0:13:03.04,0:13:04.40,Default,,0000,0000,0000,,you bought clothing
Dialogue: 0,0:13:04.40,0:13:06.08,Default,,0000,0000,0000,,from a department store often those will
Dialogue: 0,0:13:06.08,0:13:07.84,Default,,0000,0000,0000,,have like a big tag on it
Dialogue: 0,0:13:07.84,0:13:10.00,Default,,0000,0000,0000,,that the sales checkout person will have
Dialogue: 0,0:13:10.00,0:13:11.04,Default,,0000,0000,0000,,to remove. So
Dialogue: 0,0:13:11.04,0:13:14.24,Default,,0000,0000,0000,,an RFID sticker or some sort of security
Dialogue: 0,0:13:14.24,0:13:15.52,Default,,0000,0000,0000,,tag,
Dialogue: 0,0:13:15.52,0:13:19.04,Default,,0000,0000,0000,,or security tag.
Dialogue: 0,0:13:19.04,0:13:22.48,Default,,0000,0000,0000,,Now given that this is a book, like
Dialogue: 0,0:13:22.48,0:13:24.08,Default,,0000,0000,0000,,a hole, I don't want to punch a hole in
Dialogue: 0,0:13:24.08,0:13:25.84,Default,,0000,0000,0000,,my notebook for the tag,
Dialogue: 0,0:13:25.84,0:13:27.92,Default,,0000,0000,0000,,so a little RFID sticker might be a good
Dialogue: 0,0:13:27.92,0:13:30.08,Default,,0000,0000,0000,,idea and that's why a lot of stuff comes
Dialogue: 0,0:13:30.08,0:13:33.92,Default,,0000,0000,0000,,shrink wrapped in plastic. That is
Dialogue: 0,0:13:33.92,0:13:35.28,Default,,0000,0000,0000,,just so
Dialogue: 0,0:13:35.28,0:13:37.04,Default,,0000,0000,0000,,that they can then stick the RFID
Dialogue: 0,0:13:37.04,0:13:38.80,Default,,0000,0000,0000,,sticker on there and it's come a long
Dialogue: 0,0:13:38.80,0:13:39.68,Default,,0000,0000,0000,,way.
Dialogue: 0,0:13:39.68,0:13:41.36,Default,,0000,0000,0000,,The old days RFID stickers were really
Dialogue: 0,0:13:41.36,0:13:43.44,Default,,0000,0000,0000,,expensive, now I'm seeing supermarkets
Dialogue: 0,0:13:43.44,0:13:44.00,Default,,0000,0000,0000,,even,
Dialogue: 0,0:13:44.00,0:13:45.92,Default,,0000,0000,0000,,use them on things like expensive meat
Dialogue: 0,0:13:45.92,0:13:47.20,Default,,0000,0000,0000,,products. So
Dialogue: 0,0:13:47.20,0:13:49.84,Default,,0000,0000,0000,,I've got my security cameras. I've got my
Dialogue: 0,0:13:49.84,0:13:52.64,Default,,0000,0000,0000,,RFID stickers.
Dialogue: 0,0:13:52.64,0:13:55.04,Default,,0000,0000,0000,,I'm going to have, with the RFID
Dialogue: 0,0:13:55.04,0:13:55.84,Default,,0000,0000,0000,,sticker,
Dialogue: 0,0:13:55.84,0:14:00.84,Default,,0000,0000,0000,,needed with that is going to be the RFID
Dialogue: 0,0:14:00.84,0:14:03.84,Default,,0000,0000,0000,,detectors
Dialogue: 0,0:14:04.24,0:14:07.60,Default,,0000,0000,0000,,at the store, woops
Dialogue: 0,0:14:07.60,0:14:11.52,Default,,0000,0000,0000,,can't spell store, entry exit.
Dialogue: 0,0:14:11.52,0:14:13.28,Default,,0000,0000,0000,,That is also why a lot of stores will
Dialogue: 0,0:14:13.28,0:14:15.76,Default,,0000,0000,0000,,only have one entry exit point
Dialogue: 0,0:14:15.76,0:14:18.32,Default,,0000,0000,0000,,so that they can put those big gates up
Dialogue: 0,0:14:18.32,0:14:20.16,Default,,0000,0000,0000,,and often you will see those gates will
Dialogue: 0,0:14:20.16,0:14:22.08,Default,,0000,0000,0000,,be covered in advertising and things so
Dialogue: 0,0:14:22.08,0:14:23.60,Default,,0000,0000,0000,,you don't notice that it's there. So
Dialogue: 0,0:14:23.60,0:14:24.24,Default,,0000,0000,0000,,you've got
Dialogue: 0,0:14:24.24,0:14:27.36,Default,,0000,0000,0000,,your RFID, your stickers, etc.
Dialogue: 0,0:14:27.36,0:14:32.56,Default,,0000,0000,0000,,The last thing that we might do is also
Dialogue: 0,0:14:32.64,0:14:35.76,Default,,0000,0000,0000,,a store bag check,
Dialogue: 0,0:14:36.72,0:14:38.32,Default,,0000,0000,0000,,all right? So that when you leave the
Dialogue: 0,0:14:38.32,0:14:39.84,Default,,0000,0000,0000,,store they say look,
Dialogue: 0,0:14:39.84,0:14:42.56,Default,,0000,0000,0000,,can you open your bag, you know bags
Dialogue: 0,0:14:42.56,0:14:44.00,Default,,0000,0000,0000,,of a bigger size
Dialogue: 0,0:14:44.00,0:14:47.12,Default,,0000,0000,0000,,to make sure that that's happening. So
Dialogue: 0,0:14:47.12,0:14:50.64,Default,,0000,0000,0000,,that's an example here for the fact that
Dialogue: 0,0:14:50.64,0:14:53.84,Default,,0000,0000,0000,,we've got our theft. Let's do another
Dialogue: 0,0:14:53.84,0:14:56.24,Default,,0000,0000,0000,,example. My next example is still going
Dialogue: 0,0:14:56.24,0:14:58.08,Default,,0000,0000,0000,,to go back to my notebooks,
Dialogue: 0,0:14:58.08,0:15:01.92,Default,,0000,0000,0000,,but my risk is going to be
Dialogue: 0,0:15:01.92,0:15:07.60,Default,,0000,0000,0000,,the risk of charging the customer
Dialogue: 0,0:15:07.76,0:15:11.12,Default,,0000,0000,0000,,the wrong price, right? And that
Dialogue: 0,0:15:11.12,0:15:13.84,Default,,0000,0000,0000,,is going to result, for us, in inaccurate
Dialogue: 0,0:15:13.84,0:15:15.68,Default,,0000,0000,0000,,sales. So that's affecting our accuracy
Dialogue: 0,0:15:15.68,0:15:16.96,Default,,0000,0000,0000,,assertion.
Dialogue: 0,0:15:16.96,0:15:20.16,Default,,0000,0000,0000,,Now of course, in terms of prevention or
Dialogue: 0,0:15:20.16,0:15:22.56,Default,,0000,0000,0000,,detection, I want to try and
Dialogue: 0,0:15:22.56,0:15:26.16,Default,,0000,0000,0000,,prevent, okay? Then coming
Dialogue: 0,0:15:26.16,0:15:29.36,Default,,0000,0000,0000,,into the control.
Dialogue: 0,0:15:29.36,0:15:31.28,Default,,0000,0000,0000,,One thing that I could do and I can
Dialogue: 0,0:15:31.28,0:15:33.12,Default,,0000,0000,0000,,remember the days where when you went to
Dialogue: 0,0:15:33.12,0:15:34.32,Default,,0000,0000,0000,,the supermarket,
Dialogue: 0,0:15:34.32,0:15:36.16,Default,,0000,0000,0000,,you didn't actually have barcodes. There
Dialogue: 0,0:15:36.16,0:15:37.52,Default,,0000,0000,0000,,was a little sticker that somebody
Dialogue: 0,0:15:37.52,0:15:39.28,Default,,0000,0000,0000,,manually added to the product and then
Dialogue: 0,0:15:39.28,0:15:40.88,Default,,0000,0000,0000,,you typed it in
Dialogue: 0,0:15:40.88,0:15:43.52,Default,,0000,0000,0000,,into the cash register. So we could use
Dialogue: 0,0:15:43.52,0:15:46.40,Default,,0000,0000,0000,,barcode scanning,
Dialogue: 0,0:15:46.40,0:15:50.16,Default,,0000,0000,0000,,barcodes on good
Dialogue: 0,0:15:50.16,0:15:53.36,Default,,0000,0000,0000,,and scan
Dialogue: 0,0:15:53.36,0:15:56.48,Default,,0000,0000,0000,,at the register,
Dialogue: 0,0:15:56.48,0:15:59.36,Default,,0000,0000,0000,,okay? So that's going to be my control.
Dialogue: 0,0:15:59.36,0:16:00.00,Default,,0000,0000,0000,,Now,
Dialogue: 0,0:16:00.00,0:16:02.16,Default,,0000,0000,0000,,in terms of the control it's very cheap,
Dialogue: 0,0:16:02.16,0:16:03.44,Default,,0000,0000,0000,,it's efficient, you have to have,
Dialogue: 0,0:16:03.44,0:16:05.52,Default,,0000,0000,0000,,obviously, a cash register system,
Dialogue: 0,0:16:05.52,0:16:07.60,Default,,0000,0000,0000,,but the one thing that we want to do
Dialogue: 0,0:16:07.60,0:16:11.68,Default,,0000,0000,0000,,here in terms of the monitoring,
Dialogue: 0,0:16:13.28,0:16:15.68,Default,,0000,0000,0000,,all right? Is that we might want to do
Dialogue: 0,0:16:15.68,0:16:17.44,Default,,0000,0000,0000,,something like
Dialogue: 0,0:16:17.44,0:16:22.80,Default,,0000,0000,0000,,check price overrides,
Dialogue: 0,0:16:22.80,0:16:24.32,Default,,0000,0000,0000,,all right? So if somebody tries to
Dialogue: 0,0:16:24.32,0:16:26.00,Default,,0000,0000,0000,,override the price,
Dialogue: 0,0:16:26.00,0:16:27.84,Default,,0000,0000,0000,,there's a couple of different options,
Dialogue: 0,0:16:27.84,0:16:29.36,Default,,0000,0000,0000,,you could have you need
Dialogue: 0,0:16:29.36,0:16:31.60,Default,,0000,0000,0000,,manager, whoops that's meant to be an r,
Dialogue: 0,0:16:31.60,0:16:33.28,Default,,0000,0000,0000,,manager
Dialogue: 0,0:16:33.28,0:16:36.80,Default,,0000,0000,0000,,to approve any price overrides
Dialogue: 0,0:16:36.80,0:16:39.28,Default,,0000,0000,0000,,or at the end of the day, you could have
Dialogue: 0,0:16:39.28,0:16:42.72,Default,,0000,0000,0000,,a daily report
Dialogue: 0,0:16:42.88,0:16:44.80,Default,,0000,0000,0000,,about those overrides. And that's really
Dialogue: 0,0:16:44.80,0:16:46.08,Default,,0000,0000,0000,,common in retail stores where they'll
Dialogue: 0,0:16:46.08,0:16:46.80,Default,,0000,0000,0000,,say okay,
Dialogue: 0,0:16:46.80,0:16:48.96,Default,,0000,0000,0000,,give me the end of day report, oh
Dialogue: 0,0:16:48.96,0:16:50.24,Default,,0000,0000,0000,,yeah this was overwritten because this
Dialogue: 0,0:16:50.24,0:16:51.44,Default,,0000,0000,0000,,was damaged,
Dialogue: 0,0:16:51.44,0:16:53.36,Default,,0000,0000,0000,,this person had an extra discount, this
Dialogue: 0,0:16:53.36,0:16:55.28,Default,,0000,0000,0000,,was the manager's discretion,
Dialogue: 0,0:16:55.28,0:16:57.04,Default,,0000,0000,0000,,so you want to monitor how many prices
Dialogue: 0,0:16:57.04,0:16:58.72,Default,,0000,0000,0000,,were incorrect.
Dialogue: 0,0:16:58.72,0:17:00.48,Default,,0000,0000,0000,,Often there's also a thing that says
Dialogue: 0,0:17:00.48,0:17:01.84,Default,,0000,0000,0000,,oh look if the shelf says
Dialogue: 0,0:17:01.84,0:17:04.64,Default,,0000,0000,0000,,five dollars, but your thing says ten
Dialogue: 0,0:17:04.64,0:17:06.40,Default,,0000,0000,0000,,dollars you get whatever the shelf
Dialogue: 0,0:17:06.40,0:17:08.40,Default,,0000,0000,0000,,price is, so that could be one of your
Dialogue: 0,0:17:08.40,0:17:10.16,Default,,0000,0000,0000,,override codes.
Dialogue: 0,0:17:10.16,0:17:12.72,Default,,0000,0000,0000,,Now I realized back here when I was
Dialogue: 0,0:17:12.72,0:17:14.16,Default,,0000,0000,0000,,designing the controls for
Dialogue: 0,0:17:14.16,0:17:17.52,Default,,0000,0000,0000,,the risk of theft. Then,
Dialogue: 0,0:17:17.52,0:17:20.96,Default,,0000,0000,0000,,the store bag check
Dialogue: 0,0:17:20.96,0:17:22.56,Default,,0000,0000,0000,,could be one of those monitoring
Dialogue: 0,0:17:22.56,0:17:24.32,Default,,0000,0000,0000,,controls, so I realized I forgot there that I
Dialogue: 0,0:17:24.32,0:17:26.00,Default,,0000,0000,0000,,forgot to talk about the monitoring,
Dialogue: 0,0:17:26.00,0:17:30.48,Default,,0000,0000,0000,,but the store bag check could also
Dialogue: 0,0:17:31.28,0:17:35.12,Default,,0000,0000,0000,,be part of that monitoring process.
Dialogue: 0,0:17:35.12,0:17:38.40,Default,,0000,0000,0000,,I hope that that clarifies to everybody
Dialogue: 0,0:17:38.40,0:17:42.56,Default,,0000,0000,0000,,how you can design an internal control
Dialogue: 0,0:17:42.56,0:17:44.88,Default,,0000,0000,0000,,and remember to take it step by step.
Dialogue: 0,0:17:44.88,0:17:46.48,Default,,0000,0000,0000,,Think about the risk,
Dialogue: 0,0:17:46.48,0:17:48.80,Default,,0000,0000,0000,,do I want to prevent or detect, what are
Dialogue: 0,0:17:48.80,0:17:50.80,Default,,0000,0000,0000,,the control activities that I could do,
Dialogue: 0,0:17:50.80,0:17:53.44,Default,,0000,0000,0000,,automated or manual or with our systems
Dialogue: 0,0:17:53.44,0:17:55.44,Default,,0000,0000,0000,,or a combination of both,
Dialogue: 0,0:17:55.44,0:17:56.88,Default,,0000,0000,0000,,and then what am I going to put in place
Dialogue: 0,0:17:56.88,0:17:59.52,Default,,0000,0000,0000,,to monitor to make sure that control
Dialogue: 0,0:17:59.52,0:18:01.76,Default,,0000,0000,0000,,works properly. So I want to thank you
Dialogue: 0,0:18:01.76,0:18:03.44,Default,,0000,0000,0000,,for watching this video. Of course, if you
Dialogue: 0,0:18:03.44,0:18:05.68,Default,,0000,0000,0000,,haven't already considered subscribing.
Dialogue: 0,0:18:05.68,0:18:07.92,Default,,0000,0000,0000,,For all of those internal auditors out
Dialogue: 0,0:18:07.92,0:18:09.60,Default,,0000,0000,0000,,there, you might want to check out
Dialogue: 0,0:18:09.60,0:18:11.36,Default,,0000,0000,0000,,auditopia. It's a new
Dialogue: 0,0:18:11.36,0:18:13.44,Default,,0000,0000,0000,,internal audit community that I'm
Dialogue: 0,0:18:13.44,0:18:14.64,Default,,0000,0000,0000,,involved with.
Dialogue: 0,0:18:14.64,0:18:17.20,Default,,0000,0000,0000,,It has free resources that people are
Dialogue: 0,0:18:17.20,0:18:17.84,Default,,0000,0000,0000,,sharing,
Dialogue: 0,0:18:17.84,0:18:20.36,Default,,0000,0000,0000,,internal audit checklists, and
Dialogue: 0,0:18:20.36,0:18:22.24,Default,,0000,0000,0000,,documentation.
Dialogue: 0,0:18:22.24,0:18:24.88,Default,,0000,0000,0000,,And we've also got regular webinars to
Dialogue: 0,0:18:24.88,0:18:25.92,Default,,0000,0000,0000,,help you become
Dialogue: 0,0:18:25.92,0:18:28.08,Default,,0000,0000,0000,,a better internal auditor. I'm really
Dialogue: 0,0:18:28.08,0:18:30.72,Default,,0000,0000,0000,,excited to be part of the auditopia team.
Dialogue: 0,0:18:30.72,0:18:32.96,Default,,0000,0000,0000,,I'll be working with them to create some
Dialogue: 0,0:18:32.96,0:18:34.64,Default,,0000,0000,0000,,content for some courses
Dialogue: 0,0:18:34.64,0:18:36.88,Default,,0000,0000,0000,,that they're going to have. Big thank you,
Dialogue: 0,0:18:36.88,0:18:38.80,Default,,0000,0000,0000,,I want everybody to stay safe,
Dialogue: 0,0:18:38.80,0:18:40.96,Default,,0000,0000,0000,,stay well, I've checked myself on the
Dialogue: 0,0:18:40.96,0:18:43.20,Default,,0000,0000,0000,,vaccination schedule, I'm hopefully
Dialogue: 0,0:18:43.20,0:18:45.44,Default,,0000,0000,0000,,going to be vaccinated in September or
Dialogue: 0,0:18:45.44,0:18:46.72,Default,,0000,0000,0000,,October of this year,
Dialogue: 0,0:18:46.72,0:18:48.88,Default,,0000,0000,0000,,so I'm really excited about that. But,
Dialogue: 0,0:18:48.88,0:18:51.36,Default,,0000,0000,0000,,stay safe, stay well wherever you are
Dialogue: 0,0:18:51.36,0:18:57.84,Default,,0000,0000,0000,,and I'll see you next time.
Dialogue: 0,0:18:57.93,0:19:12.06,Default,,0000,0000,0000,,[Music]
Dialogue: 0,0:19:12.40,0:19:14.48,Default,,0000,0000,0000,,