RSM323H1 Chapter Notes - Chapter 7: Financial Statement, Internal Control, Internal Audit
Document Summary
Info systems, related business processes, and communication: an information system can be broadly defined as a set of interrelated functions that collect, process, store, and distribute information in an organization. Accounting control activities: the auditor uses a control framework (internal control framework, internal control structure) to understand and evaluate the auditee"s internal control, control policies and procedures make up the control activities component of the company"s control framework. General controls: general controls include organizational features, such as capable personnel, segregation of responsibilities, controlled access, and periodic comparison, are primarily preventive and have a pervasive impact on the various accounting processes. How internal control relates to the risk of material. Internal control and fraud detection: management and those charged with governance are responsible for preventing and detecting fraud. If failures to disclose would result in a material misstatement, then the auditor should attempt to reduce this risk to an appropriately low level.