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Unformatted text preview: Megan Matthews ACCT470-V2WW February 19, 2012 Assignment 8-2 Internal Control Chapter 6 6-1. What are management’s incentives for establishing and maintaining strong internal control? What are the auditor’s main concerns with internal control? Management has the responsibility to maintain controls that provide reasonable assurance that adequate control exists over the entity’s assets and records. Strong internal controls ensure that assets and records are properly safeguarded. Management also needs a control system that generates reliable information for decision making. The auditor needs assurance about the reliability of the data generated by the information system in terms of how it affects the fairness of the financial statements and how well the assets and records of the entity are safeguarded. The auditor uses risk assessment procedures to obtain an understanding of the entity’s internal control. The auditor uses this understanding of internal control to identify the types of potential misstatements, ascertain factors that affect the risk of...
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 470 taught by Professor Kwong during the Spring '11 term at Franklin.
- Spring '11