You are a Staff Auditor working on the Centegra Health System audit • The Audit Manager has asked you to review the KPMG Narrative of Client’s Fixed Asset Process that was prepared by another auditor and: o Identify 5 Internal Control Strengths and list them in the schedule below (There are plenty of internal controls discussed in narrative – I identified at least 20) o Also, indicate why this is an Internal Control Strength • The Audit Partner will be reviewing your PPE Internal Control analysis and then deciding whether or not to promote you to Audit Senior • Here is an example of the one I discussed in the audios Internal Control CHS has an annual capital budgeting process where all capital expenditures are pre-approved prior to the beginning of the fiscal year and is part of Centegra’s overall 5 year strategic plan (Page 6A) -Explaination: • The process of making long-run planning decisions for investments in projects • Managers plan significant investments in projects that have long-term implications such as the purchase of new equipment (PPE) • Managers must carefully select those projects that promise the greatest future return • Decisions made by “Capital Committee” which usually consists of CFO, COO, other VPs and Executives