MF0013-Internal Audit & Control

FALL-2015
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Master of Business Administration - MBA Semester 3
MF0013-Internal Audit & Control-4 Credits
(Book ID: 1733)
Assignment (60 Marks)
Note: Answers for 10 marks questions should be approximately of 400 words. Each question is
followed by evaluation scheme. Each Question carries 10 marks 6 X 10=60.
Q1. Describe & explain the term auditing. “Personal qualities of an auditor are important for the
successful conduct of audit”. Comment
Answer. Auditing is defined as a systematic and independent examination of data, statements,
records, operations and performances (financial or otherwise) of an enterprise for a stated
purpose. In any auditing the auditor perceives and recognizes the propositions before him for
examination, collects evidence, evaluates the same and on this basis formulates his judgment
which is communicated through his audit report.
Q2. Write the key objectives of a good internal audit system. Narrate the points of
dissimilarities b/w external & internal audit.
Answer. Five key objectives for in-demand internal auditors:
1. Looking forward. One part of internal audit’s job is to test past transactions to discover
problems and control issues. As said it’s important also to look forward, anticipate risks, and help
navigate the potentially choppy waters on the horizon.
The CAE can structure audit work to have more relevance in the executive suite to assist
organizations with being profitable, providing good customer service, and staying in compliance,
Smiechewicz said.
Q3. Give the role of internal auditor in the company management. List down the duties of
auditor under section 581ZG.
Answer. Major roles and responsibilities of internal audit function are:
 Evaluates and provides reasonable assurance that risk management, control, and
governance systems are functioning as intended and will enable the organization’s
objectives and goals to be met
 reports risk management issues and internal controls deficiencies identified directly to the
audit committee and provides recommendations for improving the organization’s
operations, in terms of both efficient and effective performance
 evaluates
Q4. The effectiveness of the internal control system can be ensured if the important aspects of
the company’s operations are kept in mind. Explain the characteristics of an effective internal
control system. Write the elements of internal control.
Answer. The Characteristics of Effective Internal Control:
1. Control Environment
The control environment is the company's attitude toward internal controls. Known as "tone-atthe-top," the control environment is a necessary condition for effective internal control, because
even the best-designed systems can be thwarted if management overrides the controls that are in
place.
Q5. Describe general EDP controls. Explain the appraisal of accounting system & related internal
control.
Answer. Electronic Data Processing (EDP) can refer to the use of automated methods to process
commercial data. Typically, this uses relatively simple, repetitive activities to process large
volumes of similar information. For example: stock updates applied to an inventory, banking
transactions applied to account and customer master files, booking and ticketing transactions to
an airline's reservation system, billing for utility services.
Q6. Explain the internal control system in insurance companies. Write down about the reporting
internal control weakness.
Answer. INTERNAL CONTROL:
¨Internal Control is a continuous set of processes carried out by an entity’s board of directors,
management and all personnel, designed to provide reasonable assurance of:
• Effectiveness and efficiency of operations.
• Reliability of financial and non-financial information.
FALL-2015
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Visit www.instamojo.com/subjects4u search for your
code pay and download fully solved assignments.
Any issues mail us at: [email protected] or contact at
09882243490

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