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Hello Sir,
for PYQ related to the documentating system, for example, Sep 2016 Q16(a)
one of the disadvantages of narrative notes method is:
“This method can make it more difficult to identify missing internal controls as the notes record the detail but do not
identify control exceptions clearly.”What is meant by control exception and why this method compare to the alternative method will not identify the control exception? Thank you.
I would just take it to mean the exceptions to the application of a control. For example, if there are circumstances in which a control may not be applied.
Other forms of documentation may be more likely to identify exceptions because they have greater focus on controls (generally) which stand out more clearly than a narrative description. Questionnaires and flowchart can be expanded to incorporate a lot of specific detail – so if there is a no to the operation of a control it can be picked up and followed through to somewhere later in the process where there might be some other relevant control.
Note that no amount of documentation would be sufficient for identifying control exceptions – that’s why tests of control need to be performed.
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