An important procedure in the CPA's audit programs is his review of the client's system of internal control.

Required:

a. Distinguish between accounting controls and administrative controls in a properly coordinated system of internal control.

b. What bearing do these controls have on the work of the independent auditor?

c. List the basic principles of a sound system of accounting control.

d. Explain why the CPA is concerned about the separation of responsibilities for operating custodianship, financial custodianship, and controllership.