Question

Put the following steps in the control risk assessment process in their logical order:

identify and evaluate control deficiencies, significant deficiencies, and material weaknesses

identify audit objectives   

identify existing controls

associate controls with audit objectives

An internal control deficiency can be caused by:

		the absence of a necessary control
		a control that is not properly designed
		a control that does not operate as designed
		any of the above conditions is a control deficiency

Match the following concepts regarding tests of the operating effectiveness of controls

Automated controls when general controls are effective When testing objective is to reduce control risk In an audit of internal control over financial reporting Manual controls

A. Test operation of controls on a sample of transactions B. Test control operation of controls on one transaction C. Test whether controls operated effectively as of the end of the year D. Test whether controls operated effectively during the entire year or other relevant period of time

Answer 1

Logical order In control risk assessment process:

1. identify audit objectives   

2. identify existing controls

3. identify and evaluate control deficiencies, significant deficiencies, and material weaknesses

4. associate controls with audit objectives

An internal control deficiency can be caused by:

d. Any of the above condition is a control defici

( I.e A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.)

Solution for match the following:

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