Ranjan SharmaRanjan Sharma asked 2 years ago

What is difference between internal control questionnarie and internal control evaluation?

1 Answers
RaviRavi Staff answered 2 years ago

 
My comments are in italics / bold
Internal Control Questionnaire (ICQ) and Internal Control Evaluation (ICE):
The internal control questionnaire show the area where weakness occur or likely to occur. They do not give any idea of the importance of those weaknesses. (So questions like Do they have standard procedure for cheques returned? are part of ICQ, now here if answer is no then that means there is internal control weakness.)
The Internal Control Evaluation brings to light importance of those weakness disclosed by ICQ. (Now in ICE there will be more questions, whether many cheques returned during the month, whether value of these cheques was high, whether many of them became bad debt, whether only in few cases new cheques received, in how many cases penalty was charged by bank and whether it was transferred to customer etc, so ICE further goes indepth and analyses how deep is the problem)

Main points of distinctions are:
(i) ICQ incorporates a large number of detailed questions but does not attempt to distinguish their relation in materiality. ICE isolates the main control objectives within the area of review. (It only focuses on determining whether procedures exists, how accuracy, completeness, authorisation etc exists, its like general check up of person)

(ii) Weaknesses are highlighted by answer “Yes” on ICE compared with ‘No’ on ICQ. (See questions above)

(iii) Answer ‘no’ in ICQ indicates a weakness real or potential, but its significance is not revealed. Whereas ICE requires audit personnel to state whether, an apparent weakness may prove to be material in relation to the accounts as a whole. (So ICE means indepth analysis of problem, quantifying it, measuring its impact and consequences, its like going to specialist of kidney as blood reports indicated problem)
(iv) The ‘Control Checklist’ in ICE is more than a summary of key control factors, and is no substitute for ICQ. (So ICE indepth analysis of problems and it is different from ICQ)
 
you can ask for more clarification as per your doubt , by commenting below in answer section:)

Call Back Request