- February 18, 2020 at 6:39 pm
What exactly are control objectives and procedures? is it the same thing as ‘recommendation’ section in I.C questions?
I know for Audit Procedures its either Substantive Procedures(AP/TOD) or Compliance Procedures(TOC) depending on the I.C system(weak or strong).
But, for Control objectives and procedures i fail to understand when and how to use it.
Like i said, my guess would be that it is used when asking for ‘recommendation’ in I.C questions.
Please help. I’m really confused.February 19, 2020 at 7:43 am
If you download our notes you will find that they are searchable “control objectives” will take you to chapter 13 where there are numerous examples.
Control procedures/processes/activities require actions to achieve control objectives.
For example – to ensure that goods are not despatched to a bad credit risk (objective), credit checks must be performed and credit limits set for each customer (procedure).
A recommendation to address a weakness is therefore to take action/perform a control procedure.
Take care with your terminology – I would take a “compliance procedure” to mean a control procedure – i.e. an action by the client in its system of internal controls.
A TOC is a test on the effectiveness of the client’s controls. E.g. following on from above example, auditor would check that there is a credit reference on file for a sample of new customers.
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