Summary Internal Control Systems Latest Verified Review 2023 Practice Questions and Answers for Exam Preparation, 100% Correct with Explanations, Highly Recommended, Download to Score A+

Internal Control Systems Latest Verified Review 2023 Practice Questions and Answers for Exam Preparation, 100% Correct with Explanations, Highly Recommended, Download to Score A+ D. INTERNAL CONTROL 1. Internal Control Systems 2. The Use of Internal Control Systems by Auditors 3. Transaction Cycles 4. Tests of Control 5. The Evaluation of Internal Control Component 6. Communication on Internal Control Internal Control Systems Why must Auditors understand the Accounting System and Control Environment of an entity? Auditor must understand the accounting system and control environment in order to determine their audit approach. How would you define what Internal Control is? Internal control is the process designed and put in place by those whose job it is to govern and manage the company to provide reasonable assurance about the reliability of financial reporting, the efficiency and effectiveness of operations and compliance with applicable laws and regulations. What are the elements that make up the Internal Control?  The control environment  The entity’s risk assessment process  The Information system relevant to financial reporting  Control activities  Monitoring of controls What is the Control Environment? The control environment includes the functions, attitudes, awareness and actions of those responsible for governance and management concerning the entity’s internal control and its importance in the entity. Because controls are more likely to operate well in an environment where they are treated as being important a strong control environment does not, by itself, ensure the effectiveness of the overall internal control system but a weak control environment can undermine the effectiveness of controls. What is the Entity’s risk assessment process? The entity’s risk assessment process involves processes the entity has put in place to identify business risk relevant to financial reporting objectives, estimating the significance of the risk, assessing the likelihood of their occurrence, and deciding upon actions to address those risk.