FIN 304 - Internal Audit and Control

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ASSIGNMENT

DRIVE	FALL 2018
PROGRAM	MBA
SEMESTER	3
SUBJECT CODE & NAME	FIN 304 - Internal Audit and Control
BK ID	B1733
CREDITS	2, 4
MARKS	30

Note – The Assignment is divided into 2 sets. You have to answer all questions in both sets. Average score of both assignments scored by you will be considered as your IA score. Kindly note that answers for 10 marks questions should be approximately of 400 words.

SET I

Question.1. What do you mean by Financial Audit? What are the advantages of Financial Audit?

Answer:A financial audit involves the verification of the financial statements of a company (or other institution or business entity) by an auditor. The aim of the audit is to verify that the financial statements have been made properly and meet the criteria set out in the Accounting Act. By law, audits are required to be performed by various types of financial and public institutions (e.g. banks, pension funds, insurance companies, joint-stock companies) and companies that meet at least two of the following conditions:

Question.2.What are the differences between internal audit and external audit list out its similarities and dissimilarities?

Answer:Internal audit and external audit are both the watchdog of entity and shareholders; however, there are some key different between internal and external audit for some perspectives. For example, purpose, employment, legal requirement, reporting and so on. The following are the key different and similarity of internal audit and external audit:

The Different of External and Internal Audit

Purpose of Audit: However, internal auditor is not

Question.3. What are the factors that are to be considered in Internal Audit Planning?

Answer:The auditor should consider the audit approach he wishes to adopt, including the extent to which he may rely on internal controls and any aspects of the audits, which need particular attention. Matters to consider by the auditor in developing overall audit plan include;

·       Understanding the accounting and internal control systems

·       the auditor should seek to understand the

SET II

Question.1. What are the basic principles that are governing internal Control?

Answer:The Code of Ethical Conduct of the internal auditor was approved by Order no. 252/2004. Based on this act, the generally accepted basic principles for the good organization and exercise of the internal auditor profession are focused on the five major objective elements:

·       Integrity;

·       Independence and objectivity;

·       Confidentiality;

·       Competence in exercising the profession;

·       Political neutrality.

Question.2. What is Audit Risk? What are the various important elements that an insurance company should ensure for effective internal control system?

Answer:Some of us were taught that internal control for smaller entities was an oxymoron. My supervisors made it clear that, because segregation of incompatible duties was not usually possible for smaller entities, internal control was non-existent.  In 2006, COSO changed the rules by publishing Internal Control over Financial Reporting — Guidance for Smaller Public Companies and recognizing there are different rules for larger and smaller entities.

Question.3. What are problems encountered in an electronic data Processing environment?

Answer:Audit clients who have not computerized their accounting systems to some extent are all but non-existent in today's marketplace. Probably as difficult to locate would be an auditor who had not questioned whether he or she had properly considered the impact of a computerized environment on audit strategy. One relevant question in a computerized environment that every auditor should ask is, "Does my audit approach result in inadvertent reliance on computer-based controls without having properly tested these controls?"

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Send your semester & Specialization name to our mail id

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