- 1] More Effective Management.
- 2] On going Review.
- 3] Performances of Staff Improve.
- 4] Ensures Optimum Use of Resources.
- 5] Division of Work.
- 1] Shortage of Qualified Staff.
- 2] Time Lag.
- 3] Ignorance of Management.
What is auditing advantages and disadvantages?
Auditing is
the process of inspecting the books of accounts to authenticate their accuracy and reliability
. It is an important process to the company itself, the government, the investors, creditors, shareholder etc. They all rely on audited accounts to make important decisions.
Which of the following is disadvantage of an internal audit?
ERRORS: The drawback of internal audit is that
there may be errors in books of accounts
. It depends upon the capability of internal audit staff. If audit staff is knowledgeable there is less chance of errors. In case of poor audit staff, there is no assurance that audited accounts are free of errors.
What are the disadvantages of internal control?
- Organizational Structure: Deficiencies in organizational structure make internal control ineffective.
- Size of the Organization: …
- Unusual Transactions: …
- Costly: …
- Abuse of Power: …
- Collusion of two or more People: …
- Obsolescence: …
- Human Error:
What is the advantage of internal audit?
Benefits of Internal Audit
Improves the “control environment” of the organization
.
Makes the organization process-dependent instead of person
-dependent. Identifies redundancies in operational and control procedures and provides recommendations to improve the efficiency and effectiveness of procedures.
What is the main function of internal audit?
Internal Audit – the traditional role
According to Chartered Institute of Internal Auditors, the role of internal audit is to
provide independent assurance that an organisation’s risk management, governance and internal control processes are operating effectively
.
What is the main objective of internal audit?
The purpose of internal audit is to provide
an objective source of information to the senior leaders or government bodies
. These include the organisation’s risks, operational effectiveness, control environment and compliance with rules and regulations and applicable laws.
What is purpose of auditing?
The main purpose of auditing is
to certify that the accounts have been prepared according to the principles of accounting
and to see where the financial statements so prepared reflect a true and fair view of the state of affairs of a business.
What is importance of auditing?
An audit is important as it
provides credibility to a set of financial statements
and gives the shareholders confidence that the accounts are true and fair. It can also help to improve a company’s internal controls and systems.
What are the advantages of an auditor?
- Compliance. Obviously this is one of the main reasons to conduct an audit: to meet the statutory requirements and regulations in your industry. …
- Business Improvements / System Improvements. …
- Credibility. …
- Detect and Prevent Fraud. …
- Better Planning and Budgeting.
What is internal control process?
Internal control is a process, effected by an entity’s board of directors, management and other personnel, designed
to provide reasonable assurance
: That information is reliable, accurate and timely. Of compliance with applicable laws, regulations, contracts, policies and procedures.
What is the difference between internal and external audit?
Internal auditors take a holistic view of their organization’s governance, risk, and control systems (in other words, primarily non-financial information), while external auditors are either concerned with
the accuracy of business accounts and the organization’s financial condition
or, in some industries, the …
What are the types of internal control?
There are three main types of internal controls:
detective, preventative, and corrective
. Controls are typically policies and procedures or technical safeguards that are implemented to prevent problems and protect the assets of an organization.
What are the features of internal control?
- Control environment. The foundation of internal controls is the tone of your business at management level. …
- Risk assessment. Risk assessment is the evaluation of your business flow and exposure to risk. …
- Control activities. …
- Information and communication. …
- Monitoring.
Why is internal control important?
Effective internal control
reduces the risk of asset loss
, and helps ensure that plan information is complete and accurate, financial statements are reliable, and the plan’s operations are conducted in accordance with the provisions of applicable laws and regulations. … Why internal control is important to your plan.
What are the functions and responsibilities of an internal auditor?
- Objectively assess a company’s IT and/or business processes.
- Assess the company’s risks and the efficacy of its risk management efforts.
- Ensure that the organization is complying with relevant laws and statutes.
- Evaluate internal control and make recommendations on how to improve.
