TOC Overview
An audit procedure to evaluate internal controls is testing.
Tests of Controls
Is the automated system that generates reminder emails for overdue accounts an existing control or a new control?
Existing
Procurement requests exceeding a certain threshold require approval from this level of management.
What is a senior manager?
What was the new control we are testing?
Automated system of data collection and categorization process for facilities emissions data.
A robust ToC should include which 4 components?
Number of Samples to Be Tested | Specific Evidence to Be Reviewed | Evidence-Gathering Techniques | Auditor's Actions
What are the two types of controls for an automated system that generates emails for overdue accounts?
Detective & Automated
This is the type of evidence-gathering technique used to test the existing control of <procurement requests require approval from senior manager above a certain threshold>.
What is Inspection (Scanning)?
This type of control is designed to prevent errors by ensuring that emissions data is accurately categorized and reviewed.
Preventive Control
Sample range for reasonable vs. limited assurance (controls that operate more than 1,000 times or on a daily basis)
For reasonable assurance, test 25-60 samples.
For limited assurance, test 10-15 samples.
When testing for whether managerial approval was obtained for the pricing model adjustments, what two evidence-gathering techniques are used?
Inspection (scanning & inquiry)
This type of system is implemented to reduce human error and enhance monitoring of vendor compliance.
What is an automated contract management system?
This evidence-gathering technique is used when reviewing flagged fleet emissions anomalies.
Observation
What is a material weakness, and how should an auditor respond?
A material weakness is a severe control deficiency risking misstatement. Auditors inform management, governance, and disclose it for transparency.
What are the three evidence to be reviewed for the control where manual adjustments to the pricing model need to be approved by managers and that the data collection process should be automatically performed by the system?
Adjustment records, approval logs, system reports
These are the three items required for a three-way matching system.
What is an Invoice, Purchase Order, and Delivery Receipt?
For fleet emissions data under Control 2, auditors examine flagged anomalies from these reports.
Weekly telematics data reports