Standards of Internal Controls - Arizona State University

5.2.4 Clearing and suspense account
transactions, including the transfer of
expense, income or capital, should
be resolved on a timely basis.
Proper recognition of income or
expense for these accounts should be
made on at least a quarterly basis.
Refer to risks: B-1, B-2, B-4, B-5
5.2.5 Consolidation, reclassification, and
other adjustments of general ledger
balances into financial statement
formats should be adequately
explained and documented to
support the financial statements.
Such adjustments should be
approved by Financial Services.
Refer to risks: B-1, B-2, B-3, B-4, B-
5
5.2.6 Procedures and responsibilities
should be established and
maintained to ensure timely and
accurate preparation, review, and
approval of external financial reports
including reports to governmental
and regulatory bodies. These
procedures should also ensure that
such reports comply with the
established requirements for
financial information and related
disclosures.
Refer to risks: B-1, B-2, B-5, B-8, B-
9
5.2.7 Comparisons and explanations of
actual financial information to
budgeted or forecasted information
should be routinely (at least
quarterly) completed; all significant
variances should be researched.
Refer to risks: B-1, B-2, B-4, B-5
5.2.8 Access to accounting and finance
records and documents should be
safeguarded.
Refer to risks: B-6, B-7, B-8
5.2.9 Accounting and financial records
should be retained in accordance
with established record retention and
tax requirements.
Refer to risks: B-7, B-8, B-11
5.2.10 Specific individuals should be given
the responsibility to discuss financial
results with individuals outside of
the university.
Refer to risk: B-6
B-4 Errors and omissions in physical
safeguarding, authorization and
transaction processing may go
undetected and uncorrected.
Financial statements and records
may be prepared inaccurately or
untimely.
B-5 Governmental reporting
requirements and/or loan restrictions
may be violated. Exposure to
litigation increases substantially due
to improper financial reporting.
B-6 Confidential and proprietary
information may be reviewed and
disclosed by unauthorized
individuals. The university’s
financial position and reputation
may be adversely affected.
B-7 Records may be destroyed or altered.
This may result in the inability to
prepare accurate and reliable
financial statements.
B-8 Financial information required for
budgeting, forecasting, or analysis
may not be available.
B-9 Policies and procedures may not be
properly or consistently applied by
or between departments. Financial
statements may be prepared
inaccurately or untimely.
B-10 The risk of error in the accumulation
and reporting of financial
information is increased.