Auditor's Understanding of Entity's Process for Monitoring Internal Control System

When considering how the entity monitors its system of internal control, the auditor may evaluate the design of the monitoring activities, such as:

Whether it is periodic or ongoing monitoring (correct)

The frequency of coffee breaks for monitoring staff

The brand of computers used for monitoring activities

The color of the office walls

What should the auditor evaluate to determine whether the controls have been effective?

The length of employee lunch breaks

The evaluation of the results of the monitoring activities (correct)

The quality of cafeteria food

The number of office meetings conducted

What might be included in the entity's process to monitor the system of internal control related to IT?

Monitoring employee vacation time

Controls to monitor complex IT environments and permissions applied in automated information processing controls (correct)

Reviewing customer feedback on products

Evaluating the company's travel expenses

What helps the auditor obtain an understanding of the nature of the internal audit function's responsibilities?

Inquiries of appropriate individuals within the internal audit function Signup and view all the answers

When may ISA 610 (Revised 2013) apply in relation to the internal audit function?

When using the work of the internal audit function to modify audit procedures Signup and view all the answers

What is the focus of the auditor's understanding of the entity's process to monitor the system of internal control in less complex entities, such as owner-manager entities?

How management or the owner-manager is directly involved in operations Signup and view all the answers

What may alert the owner-manager to issues with the timing of when customer payments are being recognized in the accounting records?

Complaints from customers about inaccuracies in their monthly statement Signup and view all the answers

What is included in the understanding of the entity’s process to monitor the system of internal control for entities with no formal process for monitoring the system of internal control?

Periodic reviews of management accounting information Signup and view all the answers

In less complex entities, what may be the focus of the auditor's understanding of the entity's process to monitor the system of internal control?

How management or the owner-manager is directly involved in operations Signup and view all the answers

What does understanding the process to monitor the system of internal control for entities with no formal process include?

Understanding those aspects of the entity’s process that address ongoing and separate evaluations for monitoring the effectiveness of controls Signup and view all the answers

Auditor's Understanding of Entity's Process for Monitoring Internal Control System

Questions and Answers

When considering how the entity monitors its system of internal control, the auditor may evaluate the design of the monitoring activities, such as:

What should the auditor evaluate to determine whether the controls have been effective?

What might be included in the entity's process to monitor the system of internal control related to IT?

What helps the auditor obtain an understanding of the nature of the internal audit function's responsibilities?

When may ISA 610 (Revised 2013) apply in relation to the internal audit function?

What is the focus of the auditor's understanding of the entity's process to monitor the system of internal control in less complex entities, such as owner-manager entities?

What may alert the owner-manager to issues with the timing of when customer payments are being recognized in the accounting records?

What is included in the understanding of the entity’s process to monitor the system of internal control for entities with no formal process for monitoring the system of internal control?

In less complex entities, what may be the focus of the auditor's understanding of the entity's process to monitor the system of internal control?

What does understanding the process to monitor the system of internal control for entities with no formal process include?

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