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If you are a professional in accounting and audit, then you can definitely think of taking up an Internal control job in any reputed organization. But if you need help to search for Internal Control job, then browse through the wisdomjobs page and get all the information of the job market related to it. Here you can find answers to all your questions like what does an internal control manager do, the scope of an internal control job, expected salary in this job and qualification required to become a Internal control manager. In an Internal Control job, you will get chance to monitor and measure the effectiveness of the process and operation of any business organization. Following are some of the Internal Control job interview questions and answers to help you clear the interview process easily.
The control environment, which is the foundation for the other components of internal control, provides discipline and structure by setting the tone of an organization and influencing control consciousness.
Factors to consider in assessing the client’s control environment include:
An entity’s risk assessment for financial reporting purposes is its identification, analysis, and management of risks pertaining to financial statement preparation. Accordingly, risk assessment may consider the possibility of executed transactions that remain unrecorded.
The following internal and external events and circumstances may be relevant to the risk of preparing financial statements that are not in conformity with generally accepted accounting principles [or another comprehensive basis of accounting]:
SAS 55 defines tests of controls as tests directed toward the design or operation of an internal control to assess its effectiveness in preventing or detecting material misstatements in a financial statement assertion. Inquiry of company personnel, inspection of client documents and records, observation of client activities, and re-performance of controls represent some of the procedures used in performing tests of controls.
If the auditor concludes, based on his or her understanding of internal control, that controls are likely to be ineffective or that evaluation of their effectiveness would be inefficient, then the auditor may assess control risk at the maximum level for some or all financial statement assertions.
If specific controls are likely to prevent or detect material misstatements and the auditor performs tests of controls in order to evaluate the effectiveness of the controls identified, then assessment of control risk below the maximum level is permissible.
Control activities are the policies and procedures management has implemented in order to ensure that directives are carried out.
Control activities that may be relevant to a financial statement audit may be classified into the following categories:
The auditor should obtain sufficient knowledge about the information system relevant to financial reporting. The information system generally consists of the methods and records established to record, process, summarize, and report entity transactions and to maintain accountability of related assets, liabilities, and equity. Communication involves providing an understanding of individual roles and responsibilities pertaining to internal control over financial reporting.
Monitoring is management’s process of assessing the quality of internal control performance over time. Accordingly, management must assess the design and operation of controls on a timely basis and take necessary corrective actions.
Monitoring may involve:
separate evaluations, the use of internal auditors, and the use of communications from outside parties (e.g., complaints from customers and regulator comments).
There is a direct relationship between objectives and components. This results from the fact that objectives are what an entity strives to achieve, while components are what an entity needs to achieve the objectives. It is also important to remember that internal control is relevant not only to the entire entity, but also to an entity’s operating units and business functions.
In general, the auditor should consider the controls that pertain to the entity’s objective of preparing financial statements for external use that are presented fairly in conformity with generally accepted accounting principles (GAAP) or some other comprehensive basis of accounting other than GAAP (OCBOA).
The controls relating to operations and compliance objectives may be relevant to a financial statement audit if they pertain to data the auditor evaluates or uses. For example, the auditor may consider the controls relevant to nonfinancial data (such as production statistics) used in analytical procedures.
The auditor’s primary consideration is whether a specific control affects the financial statement assertions rather than its classification into any particular component. Although the five components are applicable to every audit,
they should be considered in the context of the following:
IT provides potential benefits of effectiveness and efficiency for internal control because it enables the entity to:
IT poses specific risks to internal control, including:
The practitioner must obtain a sufficient understanding of internal control to enable the proper planning of the audit. Whether controls have been placed in operations is of prime importance. Operating effectiveness is not to be judged by the practitioner.
The understanding of the internal control should:
provide a basis for identifying types of potential misstatements, enable the assessment of the risk that such misstatements will occur, and
enable the auditor to design substantive tests.
Ordinarily, a combination of the following procedures is used in obtaining a sufficient understanding of internal control:
The auditor must exercise professional judgment in determining the methods and extent of documentation.
The most frequently used methods of documentation are:
The assessment of control risk is a process of evaluating the effectiveness of a client’s internal controls in preventing and detecting material misstatements in the financial statements.
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