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Why do auditors have to consider the internal controls of the organization?

Why do auditors have to consider the internal controls of the organization?

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Answer #1

Internal control is the policy placed by the management to safeguard the assets, increase efficiency and stop fraudulent behaviour in an organisation.There are three types of internal control and these are detective, preventive and corrective.

Auditors should consider the internal control of the organisation to minimise the audit risk such as inherent risk,control risk and detection risk.

Internal control are employed in the organisation to reflect the true and fair view of the financial statements of company and auditor should consider it to check whether every method employed by the management are appropriate or not.

Auditor should consider the internal control of an organisation to check whether the basic purpose of internal control such as safeguarding assets or increasing efficiency are fulfilled or not.

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