Evaluating Internal Controls

Evaluating inherent Controls Kimberly Miller ACC 544 April 30, 2012 Miriam Shealy Evaluating Internal Controls The military rank of an indispensable check up on strategy has several(prenominal) benefits to organizations. Each of the five components of an infixed tick off system; reassure sur travels, seek prizement, control activities, discipline and communication, and monitoring should be evaluated to repay the auditor a completed judgment of internal controls. The roughly effective way to valuation internal controls is to disruption the valuation into phases. Auditors should evaluate an organizations fiscal controls and assess risk based on (1) reason a invitees financial reporting controls and documenting that sagacity, (2) preliminarily assessing the control risk, and (3) testing the controls, reassessing control risk, and utilize that assessment to plan the equipoise of the audit (Louwers, Ramsay, Sinason, & Strawser, 2007). level 1: Understand and Document the thickenings Internal Controls The to a greater extent an auditor knows the more effective and efficient they domiciliate be during an audit. The auditor admits to grow an understanding of the customers internal controls and this should happen early on on in an audit.

The initial phase gives auditors and overall liberty with the control environment and focal points risk assessment, the figure of transactions do the news report system, and the design of some lymph gland control procedures (Louwers, 2007, p. 161). Auditors break by and through with go oning knowledge of the lymph nodes control environment. and so they must understand how a client assesses and responds to risk, followed by understanding the flow of transactions and financial processes. Once the auditor has a keen well rounding knowledge and understand of a clients controls they need to document this understanding. Documentation is done through the use of questionnaires, narratives, and flowcharts. single of the best ways to gain an understanding is by doing a walk-through....If you want to get a profuse essay, order it on our website: Orderessay

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