Which of the following procedures is essential to determine whether effective internal control policies and procedures have been prescribed and are being followed?
A)Developing questionnaires and checklists.
B)Understanding control policies directed towards operating efficiency.
C)Understanding the internal control and performing tests of controls.
D)Observing employee functions and making enquiries.

Question

Quizplus · Accepted Answer

Understanding the internal control and performing tests of controls is essential to determine whether effective internal control policies and procedures have been prescribed and are being followed. This involves gaining an understanding of the design and implementation of internal control, evaluating the effectiveness of those controls, and determining whether any deficiencies exist. The other choices (A, B, and D) may be helpful in understanding internal control policies and procedures, but do not necessarily involve testing or evaluating their effectiveness.

Which of the Following Procedures Is Essential to Determine Whether