ADMN 4301H Chapter Notes - Chapter 7: Subledger, Internal Control, Audit Risk

• School: Trent University
• Department: Business Administration
• Course: ADMN 4301H
• Professor: Sharla Trudell

Document Summary

Focusing on these objectives helps auditor select controls for testing to gain greatest assurance that controls are operating effectively. Failure of an entity"s controls to meet any of these objectives is a weakness in internal control: all internal control systems have inherent limitations, human error that results in control breakdown. Ineffective understanding of control"s purpose: collusion by two or more individuals to avoid control. Software program control being overridden, disabled: management decisions about nature and extent of controls being implemented. Entity-level internal controls: entity level internal controls potentially impact all entity processes. Information systems and communication: designed to capture and exchange information to conduct, manage, and control entity"s operations. Includes manual and automated systems: auditor is interested in systems relevant to financial reporting, control activities, policies and procedures that help make sure management"s directives are carried out, performance review. For example, actual vs. budget, investigation of differences.