Compare the advantages and disadvantages of narratives, flowcharts, and internal control questionnaires.

Expert Solution

Answer:

Advantages of narratives:

Complete & exhaustive detail of the system.
When properly framed formal internal control does not exist, a complete description is needed & hence it helps the auditor.

Disadvantages of narratives:

Details observation required & hence time-consuming process.
It does not readily identify weaknesses in the system.

Advantages of flow chart:

The flowchart provides a concise presentation.
Flow chart gives birds-eye views of a complete system & it is easily understandable.

Disadvantages of flow chart:

The time-consuming process as a lot of time required to prepare the flowchart.
The weakness of internal control can not be easily located.

Advantages of internal control questionnaire:

provides a comprehensive series of questions, on each aspect of internal control prepared by auditor & due to this weakness, can be easily located.
Evaluation of the internal control system becomes systematic & easy.

Disadvantages of an internal control questionnaire:

The client may answer the question framed by the auditor in a hasty way.
The client may manipulate the answer & it is also a time-consuming process.

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