15) Tests of Controls

Question 1

at what level do we use TOC?

Answer 1

assertion level

Question 2

what do we do if we find that controls are working effectively?

Answer 2

place reliance on them and thus perform fewer substantive procedures

Question 3

is TOC indirect or direct?

Answer 3

indirect as we do not directly test the FS

Question 4

what are the four types of TOC?

Answer 4

• inspection
• observation
• enquiry
• reperformance

Question 5

what is inspection?

Answer 5

examining documents and balances

Question 6

what is observation?

Answer 6

watching someone do the control

Question 7

what is enquiry?

Answer 7

enquiring with mgmt what the control is and how/why they perform it

Question 8

what is reperformance?

Answer 8

redoing the control to see if it gives same outcome

Question 9

what is the weak vs strongest control?

Answer 9

weak = observation, equiry
strongest = reperformance

Question 10

why are the weak controls weak?

Answer 10

as it is unlikely that we will get sufficient audit evidence from it

Question 11

what is the formula for TOC questions?

Answer 11

1) verb: inspect, observe, enquire, reperform
2) with who ro what? (doc, obj, person)
3) why? (purpose)

Question 12

what control objectives does audit risk look at?

Answer 12

VAC

Question 13

what are examples of controls to test?

Answer 13

• username, ID
• read-only/write-only access
• signatures
• sequence checks, other tests
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