Report on the Audit of the Monitoring of the System of Internal Control Over Financial Reporting

5. Audit Objective

The objective of the audit was to provide assurance that the management control framework established by FPB to monitor the system of ICFR is adequate and effective.

6. Audit Scope

The audit assessed the monitoring of the ongoing effectiveness of the system of ICFR. This included assessing the risk-based process in place to identify and assess/reassess key controls over financial reporting and address identified control weaknesses. In addition, the audit assessed the governance framework in place to oversee the monitoring of the system of ICFR. The audit did not assess the operating effectiveness of individual ELCs, ITGCs and PLCs.

The audit focused primarily on ICFR assessment activities planned and conducted between 2012-13 and 2014-15.

7. Audit Approach

This engagement was conducted in accordance with the Internal Auditing Standards for the Government of Canada and the Institute of Internal Auditors’ International Standards for the Professional Practice of Internal Auditing. These standards require that the engagement be planned and performed in such a way as to obtain reasonable assurance that the objectives of the engagement are achieved.

The audit included: structured interviews with FPCD staff, the DCFO and select business process owners (i.e. management and/or staff responsible for specific business processes within Justice Canada); a review of departmental documentation relating to ICFR developed by FPCD and oversight bodies; a review of ICFR-related policies, guidance and documentation developed by Treasury Board, the Office of the Comptroller General, Treasury Board Secretariat PIC working groups, other federal government departments, and industry organizations (e.g. COSO, COBIT); and file testing for a sample of ICFR assessments conducted between 2012-13 and 2014-15. This file testing included an in-depth examination of the assessments conducted for ELCs, ITGCs, and three financial statement accounts at the process level (Legal Services Revenue, Capital Assets, and Transfer Payments).

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