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Give an example for one of the seven principles of internal control. For example, an annual...

Give an example for one of the seven principles of internal control. For example, an annual audit conducted by an independent, external auditing firm is an example of performing regular and independent reviews.

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Among the seven principles of audit one of the principal is confidentiality. Auditor will have access to any internal and confidential information of his clients. So it imposes an ethical responsibility to be confidential about his clients as well as information received from them during the course of audit.

For example, auditor may obtain information pertaining to new business line or any new product launch, he may get access to financial and other statements that has not yet been released to public. He may get access to matters relating to mergers and acquisitions even before they are concrete. Thus, such sensitive and secret information if known to any unauthorised outsider say competitor can degrade the credibility of the client and cause injury to them. Hence auditor has to be very careful to not spit out any information to any unauthorised outsider under any circumstances. If he does he can be held for professional misconduct and be sued accordingly.

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