ACC311 Fundamentals of Auditing GDB 2 Idea Solution Spring 2011 June 2011

[Vuhelper]

Mr. Sajid has recently completed his Chartered accountancy degree and now he is eligible
to be appointed as an external auditor by any firm. During his learning period he learned
the following concepts regarding reviewing the internal control system of a company as:
1. Internal control also exists in small organizations.
2. ICQ (Internal Control Questionnaire) and flow charts are types of internal
control system.
3. Internal control means a procedure to control the accounting
methodology as well as taking into consideration other control as well.
4. Audit planning affects the internal control system.

[Vuhelper]

Option # 02: (is FALSE due to) ICQ and flow charts are not the type of internal control system because, the Auditor make the ICQ and flowcharts to examine independently the entity whereas the internal control system is the system which is used in the entity to gain its goal.
Option # 03: Internal control is a procedure which is used in the entity to approach its goal, in which the account system and other controls are included, therefore it is TRUE.

(If you feel these statements are false then, please sure me about that)