General phases of control evaluation, Auditing

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.

Posted Date: 3/16/2013 3:49:46 AM | Location : United States







Related Discussions:- General phases of control evaluation, Assignment Help, Ask Question on General phases of control evaluation, Get Answer, Expert's Help, General phases of control evaluation Discussions

Write discussion on General phases of control evaluation
Your posts are moderated
Related Questions
Communication with the expert If the auditor intends to use the work of an expert then he must communicate with the expert well in advance to confirm the terms of engagement an

You are the auditor of ABC Company and the audit process is almost complete. The audit report is due to be signed next week. However, the following additional information on two ma

Q. Corporations generally issue stock dividends in order to a. increase the market price per share. b. exceed stockholders' dividend expectations. c. increase the marketability of

Providers of Funds A further point to note is that modern companies can be very large with multinational activities. Preparing accounts for such a group becomes a very complex

Question: Explain the type of audit conducted by the sponsor when he suspects or comes to know that the site will be audited by FDA. A Mention type of audit conducted by the

Presentation and Disclosure - Audit Process Specific presentation involves presentation in accordance along with the suitable IFRS/IAS or International Accounting Standards.



What document usually forms the basis of the audit team briefing?

Internal Control Systems ISA 400: “Internal control system” means all the policies and processes (i.e., internal controls) accepted by the management of an entity to assist in