What Advantages Of A Company’s Internal Control Attract An Auditor To Rely On It?
There are times when the auditor depends on the details presented after the internal control of a business organization and he has significant reasons for relying on it. One such reason is that an internal control strategy is employed by the management of the company for the benefit of safeguarding its assets like the QProfit System. The other values include
- An internal audit renders the audit assurance. An auditor requires the satisfaction that all the accounting system of the company are in order and all the information regarding the business transactions are adequately recorded.
- It is an essential part of the audit programme itself. The examination and verification of the internal control system form an integral sequence of the overall audit programme.
- It assists in the process of audit planning. The primary step of an auditor is to analyze the account details of the business and an internal control will help in determining the nature, period and level of the audit procedures to be employed.
The review phase of internal control enables the auditor to identify
- If in case, any fraud plays or errors are happening in the process of business operation that could affect the business economy.
- If there is an effective internal control in use and if it is working as per plan by the company officials.
- If there is an established internal audit department existing within the organization.
- Whether a supervisor is kept for administering the overall working of this control scheme mainly during the stressed periods of the business.
There can be chances that a false play occurs during the employee recruitment process and its enrolment and the tricksters record the dummy names in the wage sheet which forms an important case to be examined by the auditor. In addition to this, the auditor should be able to understand the extent to which the functioning and recording of business transactions are concerned.
An auditor’s responsibility after evaluating the internal control strategy includes
- The auditor needs to ascertain that the account transactions occur in compliance with the company authorization and so, the assets are safeguarded accordingly.
- Further, he must take care of the internal control system of the organization that it becomes an effective tool for carrying out the main auditing programme for the same.
This means the accounting details should be timely recorded in the most precise manner.