- 10 Marks
AA – Nov 2018 – L2 – Q1a – Internal Control Systems
Explain control environment and control procedures and discuss the five elements of internal control as per ISA 315.
Question
Auditors are required by International Standards on Auditing (ISA) to understand and assess a client’s system of internal control. Consequently, auditors must use their judgment to determine whether to test all or part of the internal control system as part of their response to the assessed risk of material misstatement in the financial statements to be audited.
Required:
i. Explain the following terms:
- Control environment
- Control procedures
(5 Marks)
ii. State and explain the five elements of internal control as identified by ISA 315.
(5 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Control Environment, Control Procedures, Internal Control, ISA 315, Risk Assessment
- Level: Level 2
- Topic: Internal Control Systems
- Series: NOV 2018
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