Sistem Smachd A-staigh - Caibideil V

Chapter V: Internal Control System

• Learning Objectives: Students should be able to define internal control, its key objectives, along with the five components of effective internal control. Furthermore, contrast management's responsibilities for maintaining internal control with the auditor's responsibilities for evaluating and reporting on internal control. Students should also be able to understand internal control, assess control risk via linking key controls, and describe the process of designing and performing tests of controls.

5.1 Introduction

• Focus: This chapter examines a client's internal control over financial reporting.
• Importance: Effective internal control is a critical part of an organisation's corporate governance, essential to produce reliable financial statements.
• Effectiveness of Internal Control: Ensures sales are accurately recorded, cash receipts are collected and deposited appropriately, and assets and liabilities are valued correctly. Management is responsible for designing this system.