Issues of Evaluating the Effectiveness of the Internal Control System in Audits (original) (raw)
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The Contribution of Internal Audit to the Performance of the Internal Control System
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Using data from 250 auditing practitioners from Kuala Lumpur Stock Exchange (currently known as Bursa Malaysia) -listed companies, this study suggests that independence, scope of audit work, audit reporting, audit programs, management of internal audit department, performance of audit work, audit reviews, objectivity and professional proficiency are important internal auditing practices from the perception of internal auditors. This study also suggests that risk assessment, control activities, control environment, information and communication and monitoring are important quality of internal control system from the perception of audit committee.
The Contribution of Internal Audit to the Improvement of Internal Control System
In order to be more flexible in a perpetual mutational environment and face up to damaging effects of an economic situation in strong growth, organizations have to acquire efficient management tools allowing them to accomplish their objectives and to protect themselves against inherent risks. The implementation of an internal control system is considered to be the guarantor of an invincible organizational system and a means of control of risky operations. However, an applied and well conceived internal control provides the organization just a reasonable and not an absolute insurance about its objectives realization and sustainability. It is the reason for which an upper level control, accomplished by the internal audit function, seems to be a palliative to the internal control deficiencies, and a means of supervising and evaluating the application of procedures and internal control rules. Thus, this research aims at demonstrating how internal audit can participate to the improvement of internal control system. In this context, we have introduced a qualitative study, which was based on a sample of 10 Moroccan publicly traded companies that operate in many industries. Through the interviews conducted with this sample, we had identified firstly, the different control levels within organizations, and their degree of effectiveness and their capacity to face up risks as well as the limits of each type of control. Secondly, this research explored that internal audit is considered as a response to the insufficiencies of different lower control levels, and a means of monitoring and piloting the effectiveness of internal control system, across notably the recommendations provided
Essentiality of internal control in Audit process
International Journal of Business and Applied Social Science
Internal control in the audit process gains much attraction from the last few decades. One basic needs to understand the audit process is to understand the internal control of business organizations. Auditors cannot express and present their true opinion unless they do not understand the mechanism and system of internal control. The need to understand the system of internal control develops when audited financial statements used more for decision making for stakeholders. The main objective of this paper is to emphasize the concept of internal control and its significance to comprehend the audit process. Further, the history of internal control with the auditing framework is also in discussion. This paper is based on the theoretical approach where the concept of internal control discussed the external audit process. This paper does not cover internal audits in the discussion, the discussion and concepts are limited to external auditing. Analysis of internal control in the audit proce...
The Relative Effects of Elements of Internal Control on Auditors’ Evaluations of Internal Control
Pacific Accounting Review, 2006
Internal control evaluation is a critical component of the overall audit process, mandated by auditing standards worldwide. These standards divide internal control structures into a number of elements, summarised as the control environment, information systems, and control procedures. Significant research exists as to auditors' evaluations of internal controls. However, little work appears to consider the elements' inter-actions and relative significance.
Effect of Internal Audit and Accounting Information System on the Effectiveness of Internal Control
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This study aims to examine and analyze the effect of internal audit and accounting information systems on the automotive trading company PT. Kars Inti Amanah provides a perspective for the management of similar companies about internal audit and accounting information systems' power to increase internal control effectiveness. The population in this study were all employees of PT. Kars Inti Amanah, amounting to 67 people, were then sampled using a simple random sampling technique so that 40 samples were selected; this study uses a quantitative approach with descriptive statistical analysis to map the value of respondents' answers and multiple lien regression analysis to examine the influence between internal audit variables and accounting information systems on the effectiveness of internal control. The descriptive statistical analysis results show the overall value of the products that internal audit and accounting information systems have a positive and significant effect o...
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Weak internal controls can cause fraud in the organization or company. This causes need for internal control performance which is influenced by several factors to minimize the risk of loss by fraud. This research is aim to know the effect of internal audit, information & communication, and monitoring on internal control performance. The research method used a qualitative method and literature review or library research. The results of this literature review article are: 1) Internal audit has an effect on internal control performance; 2) Information & communication affects the performance of internal control; and 3) Monitoring affects the performance of internal control.
Internal Control System and Quality Audit Work
The Central Bank of Nigeria (CBN) reported that the backward development in the Nigeria banking sector is attributable to the weaknesses in the internal control systems and poor audit work of the banks. This has clearly pointed out the picture of how fraud has penetrated in the financial strength of Nigerian Banks. In a nut-shell, the damage which this menace, called fraud has done to the banks is innumerable and needs urgent attention. Therefore, the attempt to put an end to this economic degradation, gave rise to the topic of this research study the internal control system and quality audit work in the banking sector in Nigeria with Access Bank PLC as a case study. However, this study verifies the conception that an effective and efficient internal control system has a greater influence on the quality of audit work. Data captured for this study, were analyzed through descriptive and inferential statistical methods. The descriptive analysis involves the use of tabulation and percentages. While the inferential statistical method involved the use of the chi-square. This study reveals that internal control system has a great influence on the operations of the bank and consequently on their quality audit work. Base on the above point, it was recommended that a good internal control system should be employed by the management of every organization.
Effective internal control system plays an important role in ensuring objective achievement of organizations. Therefore, the aim of this paper is to examine the relationship between effective internal control system and internal audit effectiveness at local government level. The paper is a literature review paper and the paper concluded that effective internal control system can influence the effectiveness of internal auditors at local level. The paper needs to be validated empirically.
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This study aims to examine whether the type of internal control deficiency and the two parties that have a relationship with internal audit function influence the internal control evaluation by internal auditors. This study was conducted a behavioral experiment methodology in 2x2 between-subjects factorial design, and internal auditor as a participant. This study proved that there is an influence between the type of deficiency and the internal auditor’s evaluation. In contrast, this study could not prove the effect of the internal audit function relationship toward auditor’s evaluation of process-specific deficiency. This study has a great implication on internal control over financial reporting) in every part of the company. The limitation of this study is the findings are not generalizable beyond the internal control scenario depicted in the case materials. This study encourages future research to examine the usefulness of the role of the external auditor, and other parties charge...