Question: QUESTION 1 (20 Marks) The control environment includes the governance and management function of an organisation. It focuses largely on the attitude, awareness and actions

QUESTION 1 (20 Marks)

The control environment includes the governance and management function of an organisation. It focuses largely on the attitude, awareness and actions of those responsible for designing, implementing and monitoring internal controls. One of the main requirements in planning an audit is to study and evaluate the existing internal controls so as to define the tests to be applied to the entity being audited. Internal Control is a process, affected by an entitys board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: Compliance with applicable laws and regulations Effectiveness and Efficiency of operations Reliability of financial reporting.

With reference to the above statement, critically discuss the components of internal controls that are integrated with managements processes.

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