Question

In: Accounting

CPA Australia identifies five reasons an internal control system does not provide 100 percent assurance


CPA Australia identifies five reasons an internal control system does not provide 100 percent assurance that an organisation's objectives will be achieved. These reasons do NOT include: 

 1) judgement error.

 2) unexpected transactions. 

 3) weak internal controls.

 4) natural disasters.

Solutions

Expert Solution

Answer : Option - 4, Natural Disasters

Explanation :

Reasons for not having a good internal control or not a 100% control assurance that an organisation's objectives have achieved are as follows :

1. Judgement error

2. Unexpected transaction

3. Collusion

4. Substance over Form

5.Weak internal controls

6. Management override

These factors does not include natural disasters as a reason for not giving 100% control assurance that an organisation's objectives have achieved.


Related Solutions

If Australia did require public reporting on internal control and provision of assurance on that report,...
If Australia did require public reporting on internal control and provision of assurance on that report, how would a negative assurance report on internal controls over financial reporting likely affect share prices? Is the nature of the deficiency in internal control likely to make a difference in the potential effect on share market prices? Explain by identifying, the types of deficiencies that would most likely have a negative effect on share market prices?
If an auditor identifies an internal control weakness for an assertion, how does it affect the...
If an auditor identifies an internal control weakness for an assertion, how does it affect the audit strategy? If the auditor identifies an internal control strength for an assertion, how does it affect the audit strategy?
If an auditor identifies an internal control weakness for an assertion, how does it affect the...
If an auditor identifies an internal control weakness for an assertion, how does it affect the audit strategy? If the auditor identifies an internal control strength for an assertion, how does it affect the audit strategy?
Controls cannot provide absolute assurance.   Describe some of the major limitations of internal control and explain...
Controls cannot provide absolute assurance.   Describe some of the major limitations of internal control and explain how they diminish the reliability of internal controls.
Define Internal controls and describe the five components of a good internal control system.
Define Internal controls and describe the five components of a good internal control system.
What does the term internal control mean? What are the five components of an effective internal...
What does the term internal control mean? What are the five components of an effective internal control framework? Briefly describe the responsibilities each of the following groups of people has regarding internal control: management, the board of directors, internal auditors, others in the organization.
1a.) “A system of internal control can only give reasonable assurance against fraud and error, rather...
1a.) “A system of internal control can only give reasonable assurance against fraud and error, rather than absolute assurance.” Explain this statement, giving practical examples to illustrate your points. b.) Auditing Standards identify a number of types of fraud. Define these different types of fraud, giving examples of each. c.) Why should the auditing profession be unwilling to take full responsibility for the prevention and detection of fraud as part of the annual statutory audit?
16. Jefferson, CPA, has identified five significant deficiencies in internal control during the audit of Portico...
16. Jefferson, CPA, has identified five significant deficiencies in internal control during the audit of Portico Industries, a public company, two of these conditions are considered to be material weaknesses. The CPA communicates all of the five significant deficiencies to management. Which best describes Jefferson’s communication requirements to the audit committee and the public? A. Communicate the two material weaknesses to Portico’s the audit committee and the public, but not the three significant deficiencies that are not material weaknesses. B....
1.   What is the system of internal controls? 2.  Explain five (5) limitations of the Internal Control...
1.   What is the system of internal controls? 2.  Explain five (5) limitations of the Internal Control System? 3. Your audit plan notes that you will be testing the system of internal controls for the ‘three Es’. Explain the ‘three Es’ 4. Why should an auditor place reliance in internal controls
What is COSO? Describe the five elements of COSO's Internal Control - Integrated framework. Provide an...
What is COSO? Describe the five elements of COSO's Internal Control - Integrated framework. Provide an example of each of those components and explain why they are important in providing "Reliable Financial Reporting" for a company.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT