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Winter-2014
Master of
Business Administration- MBA Semester 4
MF0013–Internal
Audit and Control-4 Credits
(Book ID:
1733)
Assignment
(60 Marks)
Note: Answer
all questions (with 300 to 400 words each) must be written within 6-8 pages.
Each Question carries 10 marks 6 X 10=60
Q1. Define and explain the term auditing. “Personal
qualities of an auditor are important for the successful conduct of audit”.
Comment
Answer: The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, internal auditing, and government auditing, but similar concepts also exist in project management, quality management, water
Q2. Write the key objectives of a good
internal audit system. Narrate the points of dissimilarities between external
audit and internal audit.
Answer: There are five possible objectives that an internal audit might have:
Ø To determine whether controls over financial and
operating data provide managers with reasonable assurance that the financial
and operating data is accurate and reliable (i.e., that information gathering
and reporting has been properly planned, organized and directed);
Ø To determine whether controls over compliance with
policies, procedures, plans, laws and regulations provide managers with
reasonable assurance that proper compliance actually
Q3. Give the role of internal auditor in the Company’s
Management. List down the duties of auditor Under Section 581ZG.
Answer: Role of Internal Audit
What do Internal
Auditors do?
The internal auditor is often described as the organizations’
critical friend – the independent advisor who can challenge current practice,
champion best practice and be a catalyst for improvement, with the objective of
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: Characteristics of Effective Internal Control System
Control
Environment
The control
environment is the company's attitude toward internal controls. Known as
"tone-at-the-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. Indicators of
an effective control environment include having a whistleblower hotline or
discipline policies that take violations of internal control seriously.
Management override of controls or shortcuts are signs that the
Q5. Describe general EDP controls. Explain the appraisal of
accounting system and related internal control.
Answer: In an EDP
system, the following problems arise in the implementation of internal control:
a) Separation of duties:
In a manual system, separate individuals are
responsible for initiating transactions, recording transactions, and custody of
assets. As a basic control, separation of duties prevents of detects errors and
irregularities.
Q6. Explain the internal control systems in
insurance companies. Write down about the reporting internal control
weaknesses.
Answer: Internal control system in insurance
Insurance
companies paid special attention to the internal control procedures with regard
to receipts and payments of cash and cherubs, acceptance of risks, calculation
of premiums, making of loans, buying and selling of investments, payment of
commission to agents, and to control over expenses of management. An
Get solved
assignments at nominal price of Rs.100 each.
09857777350,
08894344452
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