Question

What do you test when you test a control?

Answer 1

Test of a Control is an Audit procedure which has to be done by every Auditor to check whether the internal control system is sound and good. so that Auditor can rely upon it. A week internal control increases the chances of material miss statement and may need a substantive check to which increase the time spent by the auditor in the audit of the organization. An Auditor can do the test of an internal control by following ways.

1) Reperformance: Auditor generally uses a dummy transaction and check how it is processed and which control is used by the client and whether those controls are effective or not.

2) Inspection: Auditor generally checks the limits and respective approval and signing authority for that limits. an auditor will check that the proper authority has approved the transaction and proper attention in the document are there.

3)observation: Auditor may observe the business process of the organization and check whether a proper control is there in the business process and whether are adequate and sufficient.

If there is an error found in above tests than auditor will expend his sample size.of the test of control. Any additional error in expended sample size shows that the control is not effective and a good control is required to be implemented in the organization.