Question

Jessica Chatman is a staff auditor assigned the task of performing tests of internal controls for the JC Automotive Parts engagement. Before she begins testing, Jessica must first determine the timing of her tests. Because JC Automotive is a very small engagement, all controls are manual. In planning the tests, she identifies that one control is a significantly recurring control over the revenue account that occurs once a week (52 times a year). For another control, she identifies that the control is over adjusting entries and occurs quarterly (4 times a year).
In planning the timing of the tests of the internal controls over financial reporting, which should Jessica plan to test more frequently? Would your answer change if the controls over the revenue account were automatic controls which did not change over the reporting period? Explain.



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  • CreatedJanuary 21, 2015
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