The requirement to make a study and evaluation of internal control applies regardless of the method of data processing used by a company. However, the methodology of complying with this standard may be affected by the form of the data processing system.

Required:

a. Describe the nature, purpose, and methods of the preliminary phase of the review.

b. Explain the purpose and methods of the completion phase of the review.

c. Identify the major differences between manual and EDP systems in making a study and evaluation of internal control.