The Auditor shall obtain an understanding of the entity and its environment, including its internal controls (ASA 315).? There are several categories of control activities, as listed below:

For each internal control go to practice material procedure listed below, indicate the category of control activity applicable to each procedure.

Transcribed Image Text:

Control Activities: 1. General controls 2. Application controls a. Input controls b. Processing controls c. Output controls 3. Segregation of duties 4. Physical controls 5. Performance reviews Internal Control Procedure Example: Two signatories are required on every cheque. 1. 24-hour surveillance cameras are used to record access into the warehousing department and discourage theft of inventory. 2. Overtime worked must be approved by the employee's supervisor. 3. An accounting supervisor reviews journal entries periodically for reasonableness of account classifications. 4. Sales ledger personnel make postings only to the sales ledger. 5. A supervisor reconciles the sales subsidiary ledger with the balance of debtors in the general ledger. 6. Computer equipment operators need a swipe-card to enter the computer storeroom. 7. An approved voucher is required for each cash payment made. 8. Employee payroll records are kept in a locked filing cabinet. Control Activity 2c Control Activities: 1. General controls 2. Application controls a. Input controls b. Processing controls c. Output controls 3. Segregation of duties 4. Physical controls 5. Performance reviews Internal Control Procedure Example: Two signatories are required on every cheque. 1. 24-hour surveillance cameras are used to record access into the warehousing department and discourage theft of inventory. 2. Overtime worked must be approved by the employee's supervisor. 3. An accounting supervisor reviews journal entries periodically for reasonableness of account classifications. 4. Sales ledger personnel make postings only to the sales ledger. 5. A supervisor reconciles the sales subsidiary ledger with the balance of debtors in the general ledger. 6. Computer equipment operators need a swipe-card to enter the computer storeroom. 7. An approved voucher is required for each cash payment made. 8. Employee payroll records are kept in a locked filing cabinet. Control Activity 2c

Answer rating: 100% (QA)

Internal control I... View the full answer