Prepared by: __ __ Date: _________ __ Reviewed by: __ __ Date: ____ _______

E-Curtains Trading INTERNAL CONTROL QUESTIONNAIRE

PURPOSE: Internal controls help determine the effectiveness of a business process or the systems. The following list of questions is meant as a systematic and objective tool to assess regulatory or policy effectiveness and compliance in the workplace. Department: Discussed with: Date: Level 1 Strongly disagree Level 2 Disagree Level 3 Neutral Level 4 Agree Level 5 Strongly agree

Question
Control Environment: Risk management Philosophy 1. Management recognizes and places an emphasis on the importance of risk management. 2. Management has implemented guidelines on how to assess and manage business risks. 3. Management requires employees to abide by behavioral standards and written policies. Control Environment: Integrity and Ethical Values 4. Management communicates clearly to the employees the level of integrity they expects from them. 5. Written code of conduct or other formal policies are in place and are required to be followed by employees. 6. There are incentives or disincentives to follow the code of conduct (or other similar formal policies). 7. The company culture encourages whistle-blowing. Control Environment: Commitment to Competence 1. Employees have a clear understanding of their job scope. 2. Employees are able to perform their jobs competently. 3. Management frequently reviews the performance of employees. Control Environment: Organization Structure 1. There is a clearly defined line of authority and responsibilities. 2. The company has many hierarchies. Control Environment: Assignment of Authority and Responsibility 1. Employees are empowered to exercise their own judgments. 2. Employees are held accountable for their mistakes. 3. Management makes clear to the employees the level of authority possessed by key personnel in the company. 4. Management assigns responsibilities based on the level of competency possessed by the employee. Control Environment: Human Resource and Policies 1. Employees are hired based on their abilities. 2. When hiring new employees, integrity and ethical values are some of the key qualities that management looks for. 3. The employee compensation scheme is linked to performance. 4. Formal training is provided for new employees joining the company. 5. Formal employment policies are in put into place by management. Risk Assessment: Goals and objectives 1. The mission and vision of the company is clearly communicated throughout the whole company. 2. Objectives and targets set are realistic and achievable. 3. Employees participate in the setting of objectives.

Level

Comments

Prepared by: __ __ Date: _________ __ Reviewed by: __ __ Date: ____ _______ 4. Critical success factors are identified and communicated throughout the company. 5. There are measures in place to monitor the achievements of objectives and targets. Risk Assessment: Risk 1. There is a formal risk management programme to identify and reduce possible risk exposures. 2. The likelihood and impact of risks are analyzed by management. 3. Management analyzes the cost and benefit of any risk management activities before committing resources to them. Risk Assessment: Managing Risk 1. There are mechanisms in place to monitor changes in the external environment. 2. There are mechanisms in place to react to changes in the external environment. Control Activities: Control and Procedures 1. Controls implemented are well understood by employees. 2. Customer orders are approved before acceptance. 3. A credit policy is in place to govern the giving of credit. 4. There are controls in place to ensure that orders are executed accurately. 5. There are controls in place to monitor the quality of curtains manufactured. 6. There is a segregation of custodial, authorization and recording duties. 7. There are controls to limit physical access to valuable items and information. 8. Regular maintenance is performed on all equipment. 9. Controls are in place to ensure that deliveries of the curtains are on time. Information and Communication: Information 1. E-Curtains have an information system that allows the generation of reports to aid in decision making. 2. Current and historical data are captured by the information system. 3. Information required to supplement the decision-making process is relevant, accurate and timely. 4. Information is easily accessible to those who require them during the performing of their respective duties. Information and Communication: Communication 1. There are effective external communication channels to pass information to customers, suppliers, etc. 2. Management is open to any feedbacks from employees. 3. Employees are clear about the risk appetite and tolerance of the company. 4. There are effective internal communication channels to pass information across different functional groups. Monitoring 1. Mechanisms are in place to monitor the control activities implemented. 2. Management reviews the performance and effectiveness of business processes periodically or whenever necessary. 3. Managements pay attention to and follow-up on customer complaints. 4. Management reviews actual performance against targets and objectives set.