Hire Writer When carry oning an audit of internal controls over fiscal coverage, the hearer must derive an apprehension of the audit entity so that the hearer can successful place possible internal control hazards. The hearer achieves this by utilizing the top-down attack, which is a consecutive procedure of placing hazards and which controls later need to be tested. This attack begins with the hearer placing hazards of internal control over fiscal coverage to guarantee the truth of fiscal statements. In order to guarantee truth, the hearer must place likely stuff mistakes in the fiscal statements.
Internal Controls on an Accounting Information System Internal Controls on an Accounting Information System Discussion of Internal Controls that are placed in an Accounting information System In accounting systems, certain controls are needed to ensure that employees are doing their jobs properly and ensure that the system runs properly.
These checks are in the best interest of the organization. These controls come in the form of internal and external controls for the system. Today more and more companies are moving from the manual accounting systems to computerized accounting information systems.
The advantages of a computerized system are increases in the speed and accuracy of processing accounting information.
However, as systems become computerized, the internal controls for that system has to be adapted accordingly.
This is because computerized systems bring with them certain unique problems that can only be removed or minimized by adapting the present controls and adding new controls.
All records and transactions are kept on paper and so an auditor has clear and documented proof of what has transpired. Computerized systems rarely have a clear paper trail to follow. Since computers do all of the sorting of the information the company rarely sorts the source documents.
Also the computer does most of the calculations and processing so there would not be the amount of documentation that there would be in a manual system. This cannot be done in a computerized system. This makes it very difficult to determine who is responsible for errors or fraud. This can be difficult to detect especially if the error does not occur frequently and only does so under particular conditions.
If a computerized system is not set up properly and certain checks not put in then the computer system can be used to defraud the company. The fact that it is difficult to trace who enters the data only adds to the magnitude of this.Chapter 5: Internal Control over Financial Reporting 1.
Internal control is a process designed to guarantee the achievement of the objectives of reliable financial reporting, compliance with laws and regulations and ineffective and inefficient operations.
FALSE 2. Internal Control [Questions and Answers] BEGINNER’s GUIDE; may be relevant to the risk of preparing financial statements that are not in conformity with generally accepted accounting The assessment of control risk is a process of evaluating the effectiveness of a client’s internal controls in preventing or detecting.
INTERNAL CONTROL FUNCTIONS AND OBJECTIVES. Internal control comprises the plan of organisation and all co-ordinate methods and measures adopted within a business to safeguard its assets, check the accuracy and reliability of accounting data, promote operational efficiency and encourage adherence to /5(5).
Apr 13, · Words: Length: 3 Pages Document Type: Essay Paper #: Accounting internal control is the methods and procedures used to ensure the accuracy and validity of the financial statements, as well as to protect against abuse and fraud, making sure information is delivered in an accurate and timely manner.
Internal accounting controls govern your financial system. “Management is responsible for developing and maintaining effective internal control,” reports the U.S. Whitehouse Office of. Internal controls were unequal ; contingent liabilities were non disclosed ; and, Andersen ignored all of these failings.
Evaluation of Accounting — Materiality Hearers focus on stuff deceits.