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Syllabus Part B Internal Controls

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Majid Khan
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22 views4 pages

Syllabus Part B Internal Controls

Uploaded by

Majid Khan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SYLLABUS PART B INTERNAL CONTROLS OVEREVIEW 1 Purpose of internal controls 2 Internal controls frameworks 3 Corporate governance and internal

controls

AUDITORS AND INTERNAL CONTROLS


Function and importance of internal audit
Internal audit (IA) is an independent appraisal activity established within an organisation as a service to it It is a control which functions by examining and evaluating the adequacy and effectiveness of other controls in a large organisation IA will be a separate department in smaller entities, it could be that an individual is allocated to carry out specific tasks of an IA nature it may be that the IA function is outsourced if it is an in-house department, it is important that the function is structured in an appropriate way

Scope of internal audit Management will prescribe the scope and objectives of the IA department, but these will typically include:

review of the accounting and internal control systems detailed testing of transactions and balances review of the economy, efficiency and effectiveness of operations

review of the implementation of entity policies special investigations assisting the external auditors

Independence of internal audit


for an audit function to operate successfully, it is necessary that the auditor is independent

applies equally well to internal auditors as to external auditors

for internal audit to be effective, the reviews which they carry out must be conducted and reported on an independent basis

the equivalent of the confidence which is given by the external auditor being independent

Comparison of internal and external auditors

Potential threats to independence

In the syllabus for the earlier auditing paper,

MANAGEMENT INFORMATION SYSTEMS


Information flows are vital if management is to be able to manage risk and monitor internal controls

Three elements which should be apparent:

both internal and external information is required in order that informed decisions can be made the information should be provided on a regular basis in order that management can monitor performance of economy, efficiency and effectiveness there needs to be clearly defined, effective channels of communication within the organisation so that management receive the information on a timely basis

QUESTIONS BANK

DECEMBER 2007 QUESTION 1 (d)

JUNE 2008 QUESTION 1 (e)

JUNE 2009 QUESTION 1 (b)

DECEMBER 2009 QUESTION 1 (b) and (d)

DECEMBER 2010 QUESTION 1 (c)

JUNE 2011 QUESTION 1 (a)

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