Académique Documents
Professionnel Documents
Culture Documents
CONSIDERATIONOFINTERNALCONTROL
INAFINANCIALSTATEMENTSAUDIT
Questions
1.
2.
3.
4.
1.
2.
11-2
5.
Advantages of flowchart:
Graphic presentation of systems.
Shows the steps required and the flow of forms and documents.
Easy to read and analyze.
Easy to update in subsequent years.
Disadvantages:
Takes some time to draw neatly.
6.
Character of Report
Report on IAC with opinion on IAC
system taken as a whole.
7.
8.
11-3
10. Testing of internal financial controls may permit the auditor to further reduce the
assessed level of control risk. This, in turn, should lead to a decrease in the
nature, timing, and/or extent of substantive audit testing in the circumstances.
11. The following factors may cause the auditor to decide not to test the clients
internal financial controls beyond obtaining an initial understanding:
a.
b.
12. Some combination of the following means is typically utilized by the auditor in
testing a clients internal financial controls:
a.
b.
c.
15. Reportable conditions are matters coming to the auditors attention, as a result of
his/her study and evaluation of the clients internal financial controls, relating to
significant deficiencies in the design or operation or of the internal controls that
could adversely affect the organizations ability to record, process, summarize,
and report financial data consistent with the assertions of management in the
11-4
b
a
b
d
b
b
b
8.
9.
10.
11.
12.
13.
14.
a
b
c
b
a
b
b
15.
16.
17.
18
19.
20.
21.
d
c
b
b
a
d
a
22.
23.
24.
25.
26.
27.
28.
a
a
d
b
d
b
d
Cases
1.
a.
2.
c.
11-5
2.
b.
1.
Auditors must study and evaluate internal control each year because the
environment within which the client operates is subject to constant
change; and controls must adapt to these changes if the system is to
remain effective. The auditor must identify the environmental changes
and determine that the relevant control points remain covered after the
changes.
2.
11-6
2.
ISLANDER DRUG STORE, INC.
Processing Cash Collections
Internal Control Questionnaire
-Question
Are customers who pay by check identified via store
I.D. card or other means?
Does company policy prohibit accepting checks for
anything except merchandise sales plus a
nominal cash amount?
Is a receipt produced by the cash register given to
each customer?
Is
Yes
No
11-7