What are management's requirements for internal control? What are the auditor’s requirements for internal controls for...
What are management's requirements for internal control?
What are the auditor’s requirements for internal controls for public and private clients?
What are entity-level controls and how do they impact the audit on internal controls? Provide examples of these controls.
What are the standard setters and the name of the standards for public and private audit clients?
Homework Answers
Internal control is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, laws, rugulations and policies.
Management specifies objectives within categories relating to operations, reporting and compliance with sufficient clarity to identify and analyse risks.
Management's requirements for internal control are:
I) A controlled environment is needed which provides the basis for carrying out internal controls which is a set of standards and structures. This control environment comprises of integrity and ethical values, developing and retaining individuals.
A good control system has an overall impact on the system.
2) Risk should be assessed as there is risk in every firm. Risk assessment involves a dynamic process for identifying and assessing risk for attaining the objectives.
Risk can be minimize by this process and reduce its impact on the system.
3) Control Activities are performed at each level in any enterprise at different stages. They are preventive or detective in nature such as approvals and verifications and reconciliations.
They are actions established through policies and procedures which help to ensure management directives to mitigate risk.
4) Information and communication is necessary in any firm to carry out internal control responsibilities to support the achievements of its objectives.
Management generates or obtains information which is relevant and important for its enterprise from both internal and external sources for better functioning.
5) Properly monitoring the activities and evaluating the actives to ensure that processes followed at different levels are going properly.
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What are management's requirements for internal control?
What are the auditor’s requirements for internal controls for...
Every audit firm has its approach for understanding a client’s internal control structure. Some firms use...
Every audit firm has its approach for understanding a client’s internal control structure. Some firms use a standardized internal control questionnaire to evaluate controls that are in place whereas other firms do not rely on internal controls at all and plan their audits as if there are no controls in place or consider controls as not effective. Evaluate each of these approaches to assess a client’s internal controls from an external auditor’s perception. Include in your evaluation: What effect, if...
1. Using the definition of Internal Control, discuss what is understood by the term ‘Internal Control’....
1. Using the definition of Internal Control, discuss what is understood by the term ‘Internal Control’. What are management’s and internal auditor’s responsibilities with respect to internal controls? What are suitable examples. 2. COSO Internal Control Framework is organized as comprising of Objectives, Components and Organizational Structure (Entity). What are the 'Components' of COSO Internal Control Framework in details. Any personal experiences or something that have read about. ( this can help - https://aaahq.org/Login?returnurl=%2f to do research on the component...
Option #1: Public vs. Private Company Controls Standards CEO Billy Jean has heard that due to the Sarbanes-Oxley Act, c...
Option #1: Public vs. Private Company Controls Standards CEO Billy Jean has heard that due to the Sarbanes-Oxley Act, costs have increased significantly when operating a public company. Jean is especially apprehensive with reports that he can anticipate double the audit fees due to the internal control provisions of the Act and PCAOB Auditing Standard No. 2201. Jean has asked you to explain how the Sarbanes- Oxley requirements may affect the audit Required: Organize and share your thoughts if the...
Auditors typically rely on internal controls of their private company clients A. only as needed to...
Auditors typically rely on internal controls of their private company clients A. only as needed to complete the audit and satisfy Sarbanesminus Oxley requirements. B. only if the controls are sufficient to increase control risk to an acceptable level. C. only if the client asks an auditor to test controls. D. only if the controls are determined to be effective.
principles of auditing chapter 2 QUESTION 7 The internal controls of an entity are the policies...
principles of auditing
chapter 2
QUESTION 7 The internal controls of an entity are the policies and procedures, which the entity has implemented to provide reasonable assurance that the entity's objectives are being achieved. True False QUESTION 8 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Content of the auditor's report, study of internal control, and planning. B. Competence, independence, and professional care of individuals performing the audit. C. Content...
what are some examples of internal controls based on experience? How are internal controls related to...
what are some examples of internal controls based on experience? How are internal controls related to the Sarbanes-Oxley legislation? Separately, what is the role of the internal audit function in an organization, and how does this function relate to internal control?
Every audit firm has its approach for understanding a client’s internal control structure. Some firms use...
Every audit firm has its approach for understanding a client’s internal control structure. Some firms use a standardized internal control questionnaire to evaluate controls that are in place whereas other firms do not rely on internal controls at all and plan their audits as if there are no controls in place or consider controls as not effective. Evaluate each of these approaches to assess a client’s internal controls from an external auditor’s perception. Include in your evaluation: What effect, if...
An auditable entity has an internal control significance of 0.25 and the likelihood of an internal...
An auditable entity has an internal control significance of 0.25 and the likelihood of an internal control weakness score of 0.80. We have assumed here that internal audit has taken no steps to see if the weakness were corrected. Rounded to two decimals, the entity would receive a preliminary audit score of 1.05 0.20 0.25 0.80 _________ involves redoing controls or other procedures, and provides direct audit evidence regarding their operating effectiveness. Re-performance Tracing Vouching Internal benchmarking Under the attribute...
1. Explain the what is meant by internal controls. 2. Explain the process the audit team...
1. Explain the what is meant by internal controls. 2. Explain the process the audit team uses to assess control risk; understand its impact on the risk of material misstatement; and ultimately know how it affects the nature, timing, and extent of further audit procedures to be performed on the audit. 3. Describe additional responsibilities for management and auditors of public companies required by Sarbanes-Oxley and PCAOB auditing standard #2201. I need the answer in like 200 o 250 words....
Using rendition of Internal Control under, discuss in your own words what you understand by the...
Using rendition of Internal Control under, discuss in your own words what you understand by the term ”Internal Control”. What are the management’s and internal auditor’s responsibilities with respect to internal controls? Give suitable examples
Option #1: Public vs. Private Company Controls Standards CEO Billy Jean has heard that due to the Sarbanes-Oxley Act, costs have increased significantly when operating a public company. Jean is especially apprehensive with reports that he can anticipate double the audit fees due to the internal control provisions of the Act and PCAOB Auditing Standard No. 2201. Jean has asked you to explain how the Sarbanes- Oxley requirements may affect the audit Required: Organize and share your thoughts if the...
principles of auditing
chapter 2
QUESTION 7 The internal controls of an entity are the policies and procedures, which the entity has implemented to provide reasonable assurance that the entity's objectives are being achieved. True False QUESTION 8 The three generally accepted auditing standards classified as general standards can be described as criteria for the A. Content of the auditor's report, study of internal control, and planning. B. Competence, independence, and professional care of individuals performing the audit. C. Content...
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