Love the importance of internal control in auditing. - Research Paper Example

Only on StudentShare

Extract of sample
Love the importance of internal control in auditing.

The auditor may obtain this level of assurance by performing audit procedures. The audit procedures to be performed are designed in the light of size and complexity of the entity. These are also affected by the auditor’s assessment of the risk of material misstatement and the auditor focuses on the areas where the risk of material misstatement may be present. The risk of material misstatement is the function of the inherent risk and the control risk. Inherent risk is defined as the susceptibility of financial statements and assertions therein to misstatements which are material in the context of the financial statements. On the other hand, control risk is defined as a risk that the financial statements and assertion therein may susceptible to a material misstatement which are not prevented, or remain undetected and uncorrected by the internal controls of the entity. To respond to the assessed control risks, the auditor performs test of controls. The understanding of the designed suitability and functioning of the internal controls helps the auditor in responding to those risks. It also helps the auditor to obtain reasonable assurance that the entity is achieving the financial reporting objectives. Thus, to assess the risk of material misstatement at overall financial statements level and at assertion level, it is essential for the auditor to obtain an understanding of the internal controls of the entity.
Internal control is defined as a process designed to provide the auditor, whether internal or external to the firm, with a reasonable assurance that the company is achieving its objectives. The internal controls are affected by management, those charged with governance and other personnel of the entity. ...Show more

Summary

Audit is defined as the objective evaluation of the organization processes, systems and accounts. The person conducting and carrying out the work of audit is called auditor. …
Author : nathanielgrant
Save Your Time for More Important Things
Let us write a custom research paper on your topic
"Love the importance of internal control in auditing."
with a personal 20% discount.
Find out more

Related Essays

The Effectiveness of Internal Auditing in Saudi Arabian Local Government
The Saudi Arabian government is politically divided into fourteen emirates also known as provinces. These emirates are headed by brothers, sons, nephews and next of kin of the King who currently is king Abdullah.
15 pages (3750 words) Essay
Accounting: Internal Cash Control
Check signers should not record disbursements. It may lead to errors due to conflict of interest. 2) Documentation procedure is weak as checks are not prenumbered. 3) Physical control is weak as checks are kept in an unlocked file cabinet. B) Idaho Company To: Board of Trustees From: ABC Dated: August 28, 2011 Subject: Recommendations to improve internal cash control After a thorough study of our cash disbursement mechanism, I have come up with the following recommendations.
4 pages (1000 words) Essay
Internal Control and Risk Evaluation
This creates a risk to sales department that may result to loss of revenue due to misclassification of clients; bad debtors may be classified good thus raising the dad debts percentage within the firm. The firm should identify ways of prescreening new clients, either by examining their previous bank statements, statements of financial position and consulting their business partners to establish their credit rating.
3 pages (750 words) Essay
Internal Cash Control
This is because the checks issued are not pre-numbered as a result, there is no preferable order on how the treasurer or the purchasing agent issues the checks thus, no one can be held responsible for any check loss. In addition, the checks are not safe because they are kept in an unlocked file cabinet (Kimmel, Weygandt & Kieso, 2011).
3 pages (750 words) Essay
Audit and Internal Control Issues
The first part of the report identifies the major risks, which the company faces at present and the ways in which these risks can be eliminated. In the second part, the report discusses the information required and procedures to be performed for the purpose of audit planning and risk assessment of the entity.
6 pages (1500 words) Coursework
The Audit Report and Internal Control Evaluation
These issues have been highlighted in the audit report presented as under: Anderson, Olds and Watershed, LLC Certified Public Accountants Shoetown ME 00001 Independent Auditor’s Report To the Stockholders Apollo Shoes Incorporation We have audited the accompanying balance sheets of Apollo Shoes Incorporation, as of 31st December 2007 and the accompanying income statement, statement of changes in equity and cash flow statement for the year ended 31st December 2007.
3 pages (750 words) Essay
Internal Control
Two of the primary goals of internal controls are safeguarding the assets of a company and to prevent against fraud. Three of the main components of an internal control system are the control environment, control procedures, and the accounting system. Some factors that may influence the control environment are regulations, personal policies, and monitoring of responsibilities.
3 pages (750 words) Essay
Virgin bed & breakfast
It would also exclude certain gains like the repurchase of capital instruments that are expected to be held to full development as opposed to being traded. The observation of the results in this statement utilizes the underlying profits and its constituents as the measure of performance.
4 pages (1000 words) Essay
Questionnaire - Benefit GCC become Common currency
The data has been analysed and summarized applying statistical techniques (descriptive analysis). In addition, the relationship between the variables has been analysed using regression analysis. The
8 pages (2000 words) Essay
Coca-Cola financial statements
The company realized a global volume growth of 2% and their cash operations increased to 10.6 billion dollars (The Coca-Cola Company, 2015). The company’s net operations revenue reduced from 46854 million dollars in 2013 to 45,998 million dollars in 2014. This reflected a 2% reduction in net operations revenue.
2 pages (500 words) Essay
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT