AUDITING QUESTION:

Internal Control

a) Allen Frost, the audit manager on the audit of W&W Limited, assigned Jenny Smith, one of his audit assistants, to evaluate the internal control (IC) systems at W&W Limited. As Jenny has never evaluated the internal control system of any organisation before, she is not sure what sort of general characteristics of an internal control system she should look for.

Required: Assume that Jenny approached you for help as you have evaluated IC systems of a similar nature of organisation before. Give a brief overview of the general characteristic of a satisfactory internal control system of an organisation and its inherent limitations.

b) Using the following format, in your answer book, identify TWO control policies & procedures that are normally related to the occurrence and completeness assertions for a purchase of inventory transaction. List TWO tests of controls that you, as an auditor, will performed for each of these assertions.

PLEASE PROVIDE CLEAR EXPLAIN TO BOTH PART A AND B

Tests of controls Specific control objectives Occurrence Common control policies and procedures Completeness Tests of controls Specific control objectives Occurrence Common control policies and procedures Completeness