The auditor should concentrate on the substance of managcmcnt’3 policies, procedures, and related actions controls rather than their form because
management controls may be established appropriate policies and procedures but not acted upon
.
When obtaining an understanding of an entity’s internal controls An auditor should concentrate on the substance of the controls?
When obtaining an understanding of an entity’s internal control, an auditor should concentrate on their substance rather than their form because 5.3 Understanding Internal Control 10.
When obtaining an understanding of an entity’s control environment An auditor should concentrate on the substance of management’s policies?
21) To obtain an understanding of an entity’s control environment, an auditor should concentrate on the substance of management’s policies and procedures rather than their form because: A)
management may establish appropriate policies and procedures but not act on them
.
When obtaining an understanding of controls that are relevant to the audit the auditor is required to *?
In obtaining an understanding of controls that are relevant to audit planning, the auditor should perform procedures to
obtain sufficient knowledge about the design of the relevant controls pertaining to each of the five internal control components and determine whether
they have been placed in operation.
When obtaining an understanding of an entity’s internal control an auditor should?
The auditor must obtain a sufficient understanding of the entity and its envi- ronment, including its internal control, to assess the risk of material misstate- ment of the
financial statements
whether due to error or fraud, and to design the nature, timing, and extent of further audit procedures.
What can an effective system of internal controls do?
An effective internal control system provides
reasonable assurance that policies, processes, tasks, behaviours and other aspects of an organisation, taken together
, facilitate its effective and efficient operation, help to ensure the quality of internal and external reporting, and help to ensure compliance with …
What are the purposes of internal control?
The primary purpose of internal controls is
to help safeguard an organization and further its objectives
. Internal controls function to minimize risks and protect assets, ensure accuracy of records, promote operational efficiency, and encourage adherence to policies, rules, regulations, and laws.
What are the features of accounting control systems?
- Prevent fraud.
- Control risk.
- Proactively identify financial issues.
- Protect resources (both tangible and intangible) from theft and waste.
- Operate efficiently.
- Generate timely, reliable reporting.
- Measure progress towards business objectives and goals.
What is your primary emphasis as the auditor over controls?
The primary emphasis by auditors is on controls over:
classes of transactions
. An auditor should consider two key issues when obtaining an understanding of a client’s internal controls.
Who has the primary responsibility for the performance of an audit?
The auditor
has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.
What are the 5 internal controls?
The five components of the internal control framework are
control environment, risk assessment, control activities, information and communication, and monitoring
.
Who is responsible to obtain an understanding of internal control?
Managers and supervisors
are responsible for executing control policies and procedures within their departments by: Maintaining a positive office environment that encourages internal controls through the “tone at the top,”
Which of the following best describes why an auditor is always required to document the auditor’s understanding of internal controls?
Monitoring is the means a company uses to make certain its controls are being followed appropriately. Which of the following best describes why an auditor is always required to document the auditor’s understanding of internal controls? …
To lower control risk
. To document the basis for risk assessment.
What is obtaining an understanding of an entity’s internal control?
The
audit procedures
performed to obtain an understanding of the entity and its environment, in- cluding the entity’s internal control, to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and relevant assertion levels.
What is the auditor’s responsibility for obtaining an understanding of internal control?
What is the auditor’s responsibility for obtaining an understanding of internal control? …
Need to understand controls that are relevant to the audit in order to identify and assess the risks of material misstatements
.
What are the components of internal control?
- Control Environment. …
- Communication (and Information) …
- Risk Assessment. …
- Control Activities. …
- Monitoring.
