Internal control Flashcards
(4 cards)
1
Q
How does an auditor gain an understanding of internal control?
A
Inquiry of personnel
Observation of activities
Review of documentation
2
Q
What is management’s responsibility with regard to internal control?
A
Design and implementation of an internal control policies and procedures.
3
Q
What are inherent weaknesses of internal control?
A
Collusion
Management override
4
Q
Why is internal control a consideration in planning the audit engagement?
A
Control risk is assessed to set the appropriate level of detection risk.
