Linking the Advantage of Internal Control to External Audit

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Added on 2020-04-21

Linking the Advantage of Internal Control to External Audit

Added on 2020-04-21

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Running head: AUDITINGAuditing Name of Student:Name of University:Author’s Note:

Linking the Advantage of Internal Control to External Audit_1

1AUDITINGTable of ContentsIntroduction......................................................................................................................................2Five component of internal control & model governing Internal Control with ISA315.................2Linking the advantage of internal control to external audit.............................................................4Limitation of Internal Control.........................................................................................................4Analysis of Internal control with recent case and trend of organisation threat of fraud.................5Suggestion........................................................................................................................................6Conclusion.......................................................................................................................................7References........................................................................................................................................8

Linking the Advantage of Internal Control to External Audit_2

2AUDITINGIntroductionInternal control (IC) is defined as the process for ensuring achievement of theorganisational objective and adding to operational effectiveness and efficiency. Internal controlensures the reliable reporting of the various aspects of the financial reporting and the state thefacts for compliance of the laws in an organisation. The similarity in the internal and the externalaudit has been seen in the nature of the audit process. Both the process aims to assess thepossibility of fraud or theft. In addition to this, both the process is associated to compare theregulations and the laws with the actual operation of the firm (Singh et al., 2014).Five component of internal control & model governing Internal Control with ISA315The various types of the division of the internal control is seen to take into considerationvarious types of the consideration which has been seen to state the purpose of SSA and usefulframework for the auditors to consider the various types of the entity’s internal control. Thefactors affecting the internal control have been further based on control environment, assessmentof the risk procedure of the entity. It has been further seen to be related to the consideration ofthe various types of the relevant financial reporting, communication and business process. Someof the other components have been further considered as per the control activities and monitor ofthe control techniques (Lin etal., 2014). The five components of the internal control of the entity have been discussed below asfollows:1.The control environment 2.Process of risk assessment of the entity

Linking the Advantage of Internal Control to External Audit_3

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Linking the Advantage of Internal Control to External Audit