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Hello Sir,
There is a question in BPP Revision kit, the question is as follows:– Explain what is meant by ‘ICQ’ and ‘ICEQ’?
For each type of questionnaire, give one example of a question that might be included in respect of the purchases cycle. (6 marks)My answer is:
• ICQ is a list of question which the auditor asks the client’s staff to enable him to identify controls within the system. It enables the auditor to identify areas of weakness as well as controls. The client’s staff should answer in ‘Yes’ or ‘No’. Based on the answers, the auditor will design a series of tests, known as audit programme.Example: Are purchases authorized by a responsible officer?
• ICEQ is a standard set of question answered by the auditor himself to ensure that the control objectives have been achieved. It is used to evaluate the effectiveness of the system. Answer ‘Yes’ means there is a high risk fraud & error while answer ‘No’ means there is a low risk of fraud & error.
Example: Can purchases take place without the authorization of responsible officer?
The answer in the kit is completely different from mine. I would like to know to what extent is my answer is correct and how many marks will I be able to score in such a question.
Thank you for ur consideration, looking forward for a reply soon.
Your answer is not quite accurate, particularly in ICEQ. But overall not bad. It should say:
• ICQ is a list of questions which the auditor asks the client’s staff to enable him to identify specific control procedures within the system. It enables the auditor to identify areas of weakness as well as controls. The client’s staff should answer in ‘Yes’ or ‘No’. The answer ‘Yes’ means that a control procedure is present. Based on the answers, the auditor will design a series of tests, known as audit programme.
Example: ‘Are purchases authorized by a responsible officer?’ or ‘Are goods counted and inspected as they are received?’
The auditor would want the answer ‘Yes’ to both questions.
• ICEQ is a standard set of questions designed to find out if control objectives have been achieved. It is used to evaluate the effectiveness of the system. Answer ‘Yes’ means the control objective has not been met; ‘No’ means the control objective has been met.
Example: Can unauthorised purchases take place? [Note that authorisation by a responsible official is only way that this could be prevented. Another way would be some sort of computer control that produces an order only when stock falls to a certain level. But ICEQs focus on objectives, not specific procedures.]
The auditor would want the answer ‘No’.
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