When considering the internal control structure an auditor should be aware of the concept of reasonable assurance which recognizes that?
Audit & Advisory Services is committed to assisting all levels of management and staff in the achievement of UCSF's goals and objectives by striving to provide a positive impact on the efficiency and effectiveness of operations. To that end, the internal controls information provided below covers the basic concepts of internal controls and their application to UCSF, including: Show
Internal controls summary Internal controls summaryInternal control is a process, effected by an entity’s board of directors, management and other personnel, designed to provide reasonable assurance:
Internal controls are intended to prevent errors and irregularities, identify problems and ensure that corrective action is taken. In many cases, process owners within your department perform controls and interact with the control structure on a daily basis, sometimes without even realizing it because controls are built into operations. Control definition reflects certain fundamental concepts:
Internal controls are established to further strengthen:
Internal control structureThe internal control structure is derived from the way management runs an operation or function and is integrated with the management process. Although the components apply to the entire University, small and mid-size departments may implement them differently than large ones do. Together, they are designed to provide reasonable assurance that overall established objectives and goals are met. The internal control structure consists of five inter-related components:
Internal control typesDifferent risks and environments require different controls. The control types described below can be used in combination to mitigate risks to the organization. Preventive and detection controls
Hard vs. soft controls
Manual vs. automated controls
Key vs. secondary controls
To identify the correct control(s) to implement, you must know what risks are present. To know what risks are present, you need to understand what objectives are being sought. Therefore, Objectives → Risks→ Controls. Internal controls in my departmentControl activities within your department may include the following:
Remember, everyone in your department has responsibility for internal controls. Note: The above internal controls definition was developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), which is recognized by UCSF Audit & Advisory Services. What is the reasonable assurance that internal control provides?Internal control is a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance: That information is reliable, accurate and timely. Of compliance with applicable laws, regulations, contracts, policies and procedures.
What is the concept of reasonable assurance?Reasonable assurance refers to the auditor's degree of satisfaction that the evidence obtained during the performance of the audit supports the assertions embodied in the financial statements.
When considering internal controls an important point to consider is that?When considering internal controls, an important point to consider is that: auditors are concerned with the client's internal controls over the safeguarding of assets if they affect the financial statements. Of the following statements about internal controls, which one is least likely to be correct?
How does the auditor obtain reasonable assurance?In order to obtain reasonable assurance, the auditor shall obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the audit opinion. Reasonable assurance is obtained when the auditor has thereby reduced audit risk to an acceptably low level.
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