Internal Control Evaluation

Internal Control Systems
ACC/544

Abstract
This paper gives a description of terce phases of inside take for evaluation and presents an example of a statewide internal control checklist.

Phases of Internal Control Evaluation
According to military commission of Sponsoring Organizations of the Treadway Commission (COSO), internal control is a process realised by an entitys board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the pastime three categories:
* Reliability of financial reporting
* Effectiveness and efficiency of operations
* configuration with applicable laws and regulations (Louwers, Ramsay, & Sinason, 2007, p. 149)
Auditors evaluate invitees internal control by following three sequential coherent phases:
* Obtaining an fancying of the clients internal controls and documenting that understanding
* Assessing the preliminary control risk
* Testing the controls, reassessing risks, and planning substantive procedures

Phase 1: Understanding the clients internal control
During the early phase auditors gather evidence about the clients internal control and document their understanding.



Narratives, escapecharts, and internal control questionnaires (checklists) atomic number 18 common audit methods used to study and evaluate the animated internal control.
Narrative description is a document which describes all in all environmental elements, accounting system and control of a client (Louwers, Ramsay, & Sinason, 2007).
Flowcharts are visualization tools that help to understand flow of information and documents within a company. They represent the inputs, outputs, and sequences of processes. Auditors use flowcharts to understand better the clients system and identify differentiate control points.
Auditors use checklists to conduct a formal converse with clients responsible managers. The...If you want to get a full essay, order it on our website: Orderessay



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