General phases of control evaluation, Auditing

Assignment Help:

General phases of control evaluation are:

Phase 1: Understand and document

• Understand the client's internal control

• Document the understanding of internal control

o Internal control questionnaire
o Narrative
o Accounting and control system flowcharts

Phase 2: Assess control risk (Preliminary)

Phase 3: Testing and reassessment

• Perform test of control audit procedures
• Re-assess control risk

(b) Following lines briefly describes each of the three phases identified above:

Phase 1: Understand and document:

The auditor must fully understand the control environment and procedures and properly documentation must be maintained for future reference. As the audit is programmed on the level of internal control maintained by the auditee, the more strict the internal control system the less efforts the auditors have to make. The auditor can use various methods according to the assignment like internal questionnaire, flowcharts and narratives.

Phase 2: Assess control risk:

The auditor will substantiate his work according the control risk inherent in the audit assignment. If according to auditor's judgement more risk is involved, then detailed audit procedures will be undertaken to fulfill the assignment.

Phase 3: Testing and reassessment:

A final testing and reassessment will help the auditor to control his work and carry on the assignment smoothly. Advances in technology and data analysis have led to the development of numerous tools which can automatically evaluate the effectiveness of internal controls. Used in conjunction with continuous auditing, continuous controls monitoring provides assurance on financial information flowing through the business processes.


Related Discussions:- General phases of control evaluation

Important points about auditor - audit process, Important Points about Audi...

Important Points about Auditor - Audit Process The Points that should be noticed that: i. The auditor must forever date his audit report. This date should be as close as pr

Timing of tests of control, Timing of Tests of Control - AUDITOR should per...

Timing of Tests of Control - AUDITOR should perform tests of controls over a period of time which is adequate to determine whether, as of the date specified in management's report,

Adjusting events - audit process, Adjusting Events - Audit Process Adj...

Adjusting Events - Audit Process Adjusting events are those such give evidence of conditions such existed at the balance sheet date as the settlement of a court case than the

Need for an audit, The Need for an Audit If you take an example of a mode...

The Need for an Audit If you take an example of a modern large liability company, we can clearly distinguish between the providers of funds and those who control those funds. The

Auditors procedures during stock taking, Auditors Procedures During Stock T...

Auditors Procedures During Stock Taking The main task during stock taking is to ascertain where the client's employees are carrying out their commands properly. It is particul

.audits, distinguish between early audits and modern audits

distinguish between early audits and modern audits

Standardization of working papers - auditing, Standardization of Working Pa...

Standardization of Working Papers - Auditing The ICPAK guideline states that the needs of standardized working papers may improve the effectiveness along with that they are re

Explain the importance and role of audit standards, Question 1: Auditin...

Question 1: Auditing standards regulate the audit profession. a) Explain the importance and role of audit standards. b) Lists four of the standards issued by the INTOSAI

Cloud 9 pty ltd case study, Using the 30 September 2011 trial balance (appe...

Using the 30 September 2011 trial balance (appendix to this case study) calculate planning materiality and include the justification for the basis that you have used for your calcu

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd