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Risk Assessment: Internal Control Evaluation from an Auditors Point of View - Term Paper Example
Finance & Accounting
Pages 5 (1255 words)
Risk Assessment: Internal Control Evaluation Name: Institution: Risk Assessment: Internal Control Evaluation Control Systems and Risk Management intend to guarantee that the dangers of an organization are recognized and controlled and that the deliberate goals are attained while observing with valid regulations and laws at a sensible phase of assurance…
A proper internal control system entails the execution of efficient and effective control activities at different areas of an organization. The internal control system should be set up by the management parallel with the strategies and objectives established by the board of directors or management, and should incorporate all workers in the organization. The activities should be evaluated and documented on a continuous basis as an included component of daily activities (Van, 1999). This paper will look at an evaluation of Internal Controls from an Auditors point of view. Auditing the internal controls is a properly thought out evaluation performed to guarantee that audit risk, for example, control risk, inherent risk, and detection risk, are practically in the satisfactory scale. In addition, audit risk refers to the prospect of an inaccurate view is provided by the auditor, for example, an auditor providing an incompetent view when a competent view should be provided. A proper internal control system requires an adequate separation of work and concise outline of responsibilities, both between functions and at a personal level. In each audit, an auditor should acquire at least a minimal understanding of the customer’s internal controls that have an impact on every financial process and business (Committee of Sponsoring Organizations, 1992). ...
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