Every audit firm has its approach to understanding a clients internal control structure. Some firms use a
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Question:
Every audit firm has its approach to understanding a client’s internal control structure. Some firms use a standardized internal control questionnaire to evaluate controls that are in place whereas other firms do not rely on internal controls at all and plan their audits as if there are no controls in place or consider controls as not effective.
Evaluate each of these approaches to assess a client’s internal controls from an external auditor’s perception. Include in your evaluation:
- What effect, if any, the size of the organization has on the decision?
- What are the auditing standard requirements for obtaining an understanding of internal controls?
- What are the differences, if any, in understanding internal controls for a public company versus a non-public company?
Prepare a report evaluating each approach. Also, include your opinion on which approach is better and why.
Related Book For
International Business The Challenge of Global Competition
ISBN: 978-0077606121
13th edition
Authors: Donald Geringer Ball, J. Michael Geringer, Jeanne M. McNett, Michael S. Minor
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