MF0013 & INTERNAL AUDIT AND CONTROL

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DRIVE Fall 2014

PROGRAM/SEMESTER MBADS (SEM 3/SEM 5)

MBAFLEX/ MBAN2 (SEM 3)

PGDFMN (SEM 1)

SUBJECT CODE &

NAME

MF0013 & INTERNAL AUDIT AND CONTROL

Q.1: Distinguish between secretarial audit and cost audit. Write the advantages and

disadvantages of continuous and periodical audit.

Difference between secretarial audit and cost audit

Advantages and disadvantages of continuous and periodical audit

ANS:

Difference between secretarial audit and cost audit:

secretarial audit	cost audit
1.Secretarial audit is audit of company secretarial and administration matters, whereas cost audit is concerned with verification of cost accounts, records and reports.	1.cost audit means ‘the detailed checking of the costing system, techniques and accounts to verify their correctness and to ensure adherence to the objective of cost accounting.’

Q.2: Write the characteristics of internal check system. Explain the essentials of effective internal auditing.

Characteristics of internal check system

Essentials of effective internal auditing

ANS:

Characteristics of internal check system:

The characteristics of a good internal check system are:

1. Proper segregation of duties.

2. Automatic checking of a job.

3. Multiple recording of the same transaction.

4. Rotation of jobs.

Q.3: The audit firm follows certain policies and procedures. Explain the quality control policies adopted by an audit firm.

Explanation of all the 12 points under audit firm

ANS:

The firm’s system of quality control should include policies and procedures addressing each of the following elements:

(a)        Leadership responsibilities for quality within the firm.

(b)        Ethical requirements.

Q.4: Explain the basic principles of governing internal control

Basic principles of governing internal control

ANS:

Basic principles of governing internal control:

The basic principles governing internal control are as follows:

1. A proper system, preferably in writing, must be implemented so that origination, recording and accounting of business transactions take place in a standardised way.

2. The authority and responsibility of every official should be fixed.

Q.5: Discuss the specific problems of Electronic Data Processing (EDP) relating to internal control.

Explanation of all problems of EDP

ANS:

Explanation of all problems of EDP:

The implementation of internal control in an EDP system, give rise to the following problems:

(a)   Separation of duties:The responsibility for initiating transactions, recording transactions and custody of assets, lies with separate individuals in a manual system. This is a basic control necessity for any

(b)    

Q.6: Explain the factors for having the effective internal control system for a bank. Explanation of various aspects of having the effective internalcontrol system.

ANS:

Explanation of various aspects of having the effective internal control system:

An effectiveinternal control system for a bank should consider the following aspects:

1.      Control environment: Control environment is the foundation of an internal control system. It includes and reflects the factors that influence the control consciousness of its people. As per Auditing and Assurance Standard 6 issued by ICAI (AAS6), control environment is the overall attitude, awareness and actions of directors and management about the internal control system and its importance in the entity.

Dear students get fully solved  SMU MBA Fall 2014 assignments

Send your semester & Specialization name to our mail id :

  “ help.mbaassignments@gmail.com ”

or

Call us at : 08263069601

 (Prefer mailing. Call in emergency )