Question

Tick mark the correct answer.
In evaluating internal control, the first step is to prepare an internal control questionnaire or a flow chart of the system. The subsequent steps should be followed:
$1$. Determine the extent of audit work necessary to form an opinion
$2$. Gather enough evidence to determine as to whether the internal control system is functioning as described
$3$. Write a letter to the management describing the weaknesses in the internal control system
$4$. Form a final judgement on the effectiveness of the internal control system
The correct sequence of these steps would be.

• A. $1,2,3$ and $4$
• B. $2,4,1$ and $3$
• C. $2,1,3$ and $4$
• D. $2,4,3$ and $1$

Answer 1

Answer: (A)

$1,2,3$ and $4$

Internal control, as defined by accounting and auditing, is a process for assuring of an organization's objectives in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies.

The correct sequence that should follow in internal control system :-

11. Determine the extent of audit work necessary to form an opinion
22. Gather enough evidence to determine as to whether the internal control system is functioning as described
33. Write a letter to the management describing the weaknesses in the internal control system
44. Form a final judgement on the effectiveness of the internal control system