Question

In about 3 brief sentences.... Distinguish the role for INTERNAL CONTROLS for Management and Auditor:

1) Management mostly responsible for __________?

2) Auditor mostly responsible for ___________?

3) Confusion often exists related to ____________?

Answer 1

1) Management mostly responsible for the adoption of sound policies in accounting and for establishing as well as maintaining internal control that will, among other things, initiate, process, record, and report transactions (which includes conditions and events) to be consistent with assertions by management as embodied in the financial statements.

2) Auditor mostly responsible for expressing an opinion on whether management has presented fairly the information in the financial statements. An auditor ensures compliance with established procedures of internal control by examining reports, records, operating practices, and documentation.

3) Confusion often exists related to difference in perception of what are risks. The management are focusing on the business risk while the methods of internal control methods merely focus on the general common cross-risks