You are an internal audit manager in a central government department that provides subsidies to agricultural businesses involved in the production of staple foods. You will soon be conducting an internal audit of the claims processing unit in your department. In preparation for the assignment you reviewed the audit files of previous audits conducted the previous three years. You found the following excerpt from one of the previous internal audit planning schedules:
“The unit receives periodic subsidy claims from agricultural businesses on the S100 form, along with the necessary documentary evidence to support the claim.

This form is assigned a unique reference number upon receipt and details of the claim are recorded in a computerized register by the claims clerk.

Claim forms and documentary evidence are examined by caseworkers, who approve claims for payment by completing the relevant sections of computer records, after they have verified the completeness and validity of the documentary evidence provided.

The claims unit supervisor receives a weekly schedule of approved claims for payment and reviews the prepayment of the percentage of claims determined according to a number of claim value thresholds.

The internal audit review in this area will take the form of a stratified sample of claim forms according to values retrieved from the approved claims register computer. This sample claim form will be verified by referring to the supporting documentary evidence provided by the plaintiff.

After considering this quote, you are concerned that the approach previously taken is more suitable for external audits than internal audits, and you decide to design a new test suite for future audits.

Question:
a. Describe the risk management associated with a claims processing system?

b. Describe three additional tests you would perform as an internal audit to assess the effectiveness of the process?