7-1 7-2 and 7-9

Written narrative of internal control (268) A written summary of internal control for inc audit working papers. Written narratives are more flexible than questionnaires, but by t practical only for describing relatively small, simple systems. Ives are 7-1. What is internal control? 7-2. Identify the five components of an organization's internal control. 7-3. List the principles related to an organization's control environment. 7-4. How does separation of the record keeping function from custody of assets contribute to inter- nal control? through embezzlement. Describe what is meant by the risk assessment component of internal control and how it con- tributes to internal control. 7-6. 7-7. Describe the two types of monitoring and provide an example of each. 7-8. Identify the four types of control activities and describe how each type contributes to effective internal control. 7-9. One basic concept of internal control is that no one employee should handle all aspects of a transaction. Assuming that a general category of transactions has been authorized by top man- agement, how many employees (or departments) should participate in each transaction, as a minimum, to achieve strong internal control? Explain in general terms the function of each of these employees