MF0013 & INTERNAL AUDIT AND CONTROL

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DRIVE:          SPRING 2016

PROGRAM: MBA

SEMESTER: 3

SUBJECT CODE & NAME: MF0013 & INTERNAL AUDIT AND CONTROL

BK ID: B1733

CREDITS: 4

MARKS: 60

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Q.1: Distinguish between Government audit and Specific audit. Explain types of Government and Specific Audit?

Distinguish between Government audit and Specific audit. (5 Marks)

Explain types of Government and Specific Audit? (5 Marks)

Ans:

Distinguish between Government audit and Specific audit:

Government audit is yet another variety of general audit. Government audit is a particular variety of external audit done by the CAG, concerned exclusively with government activity.

A specific audit is one which is limited in its scope in terms of coverage of areas, events or period. Generally, the objectives of specific audit are

Q.2: Write the similarity and dissimilarity of Internal and External Audit? Explain the Co- operation between external and internal auditor.

Similarity and Dissimilarity of Internal and External Audit (5 Marks)

Co-operation between external and internal Auditor (5 Marks)

Ans:

Similarity and Dissimilarity of Internal and External Audit:

Similarity

1. Evaluation of the internal control systems of the entity.

2. Correctness of accounting documentation, bookkeeping and financial reporting.

3. Verification of assets.

There is a similarity in the

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 (10 Marks)

Ans:

Explanation of all the 12 points under audit firm:

1. The audit firm should ensure that all audits comply with auditing standards, and accordingly the firm has to design and implement quality control policies and procedures.

2. The quality control policies to be adopted by an audit firm will usually include the following:

  (a) Professional requirements: The firm’s personnel have to follow the principles of independence, objectivity, confidentiality, integrity and professional behaviour.

  (b) Skills and

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

Basic principles of governing internal control (10 Marks)

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.

3. Accounting entries

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

Explanation of all problems of EDP  (10 Marks)

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 organisation.

Q.6: Explain the factors for having the effective internal control system for a bank.

Explanation of various aspects of having the effective internal control system (10 Marks)

Ans:

Basic considerations for an effective internal control system for cash and bank transactions are:

1. Independent handling of receipt and opening of mail and preparation of statement of receipts of money orders and cheques from the mail.

2. Advise to customers and other

Dear students get fully solved assignments

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or

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