Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › How to differentiate b/w controls & test of controls
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Kim Smith.
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- August 4, 2020 at 3:11 pm #579208
I’m having difficulty understanding & differentiating b/w controls & test of controls for different systems such as Cash system, Sales system etc. How can I can correctly identify test of controls by just identifying controls?
I know that it might be a foolish thing to ask, but is there any way where I can find most of the controls with their test of controls anywhere? Maybe I try to review & memorize them if possible
August 4, 2020 at 5:01 pm #579239I do not recommend memorising – no two exam questions are exactly the same and you can write all you like from memory/previous answers – but if it doesn’t answer the question set it will earn no marks. Better that you understand the basics so that you can apply commonsense to an exam scenario.
On page 68 of the notes you have a summary of the 5 components of internal control – the most important of these are the control environment and control activities. On page 69 you have a summary of the different types of control activities – remember these are controls implemented by management over systems. If you understand these you should be able to understand them in different scenarios.
Tests of controls – i.e. the auditor’s procedures to test whether or not the controls are operating effectively – are summarised on page 71. There are essentially only 4 different procedures – ask (inquire), look at (inspect), watch (observe) and do it again (reperform). You can’t “observe” a document – it doesn’t move – but you can inspect it. So you only observe activities while they are being conducted by client’s staff – like counting inventory at a stocktake.
Please watch the accompanying lectures.
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