Return to CHAPTER 20
Return to CHAPTER 20 Why internal control is reasonable assurance?Internal control is a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance: That information is reliable, accurate and timely. Of compliance with applicable laws, regulations, contracts, policies and procedures.
What are the 3 objectives of an entity where internal controls are designed to provide reasonable assurance?Internal control is geared to the achievement of objectives in several overlapping categories. Internal control can be expected to provide only reasonable assurance to an institution's leaders regarding achievement of operational, financial reporting, and compliance objectives.
Why do internal auditors provide reasonable assurance rather than absolute assurance?The exercise of due professional care allows the auditor to obtain reasonable assurance that the financial statements are free of material misstatement, whether caused by error or fraud. Absolute assurance is not attainable because of the nature of audit evidence and the characteristics of fraud.
What are the three objectives of internal control?Strong internal controls allow for organizations to achieve three main objectives. These three objectives are: accurate and reliable financial reporting, compliance with laws and regulations, and effectiveness and efficiency of the organizations operations.
|