1. Define internal control.

2. Internal control provides reasonable assurance. Explain.

3. What are the objectives of a system of internal control?

4. Enumerate, and explain briefly, the components of an internal control.

5. What is the control environment? What are the elements that comprise the control environment?

6. What is meant by risk assessment process?

7. What is an information system?

8. What are control activities?

9. Give the different types of control activities.

10. Why is it necessary to monitor controls?

11. What are the inherent limitations of internal controls?

12. Enumerate, in chronological order, the steps followed in the study and evaluation of internal controls. Explain each step briefly.

13. What is a transaction walkthrough?

14. What are the different ways by which an understanding of controls is documented?

15. When is the control risk assessment High? Less than high?

16. How does a high control risk assessment affect the planned audit approach?

17. Give examples of responses to the assessed risk of material misstatement.

18. What is the relationship of a less than high control risk assessment to the nature, extent, and timing of substantive tests?

19. May substantive tests be eliminated?

20. How are audit matters related to internal control communicated to management and to those charged with governance?