Internal control Flashcards
componenets of internal control controls and systems control testing & substantive testing
1
Q
who is internal control carried out by
A
by the entity not auditor
2
Q
if control risk is low
A
- place more reliance on internal controls
- reduce the quantity of substantive testing
3
Q
if control risk is high
A
- obtain more external evidence
- increase location of scope
- increase volume of procedures
4
Q
limitations of internal control
A
- human error
- management override
- ineffective controls
- auditor must always test material balances in f.s
5
Q
C.R.I.M.E
A
1- Control Activitys (P.a.i.r.s) 2- risk assessment process 3- Information system relevant to f.r 4- Monitoring of controls 5- control Envionment
6
Q
Control activitys
A
policies and procedures designed to ensure managemt directives throughout.
P-hysical Control A-uthorisation I-nformation Proccesing performance R-eview S-egregaation of dutys
7
Q
Risk assesment proccess by entity
A
how management determines risk to be managed.
-good risk assessment=lower overall misstatement
8
Q
Information system relevent to F.R
A
business process relating to :
- records & report transactions
- it and manual communication
- transferring transactions
9
Q
Monitoring of Controls
A
clients process of assessing its control
can be ongoing or annually
INTERNAL AUDITORS JOB
10
Q
Control E-nvironment
A
- Governance & Management
- attitude, awareness and actions to implementing internal control
- organisational structure
- enforcement of ethical and integrity values
