Internal Control Questionnaire to Evaluate Internal Control Structure

Internal control structure is the key function for a business organization. A internal control questionnaire can bring a perfect picture of internal control structure. So, we provide a internal control questionnaire to evaluation internal control structure.

Internal Control Questionnaire

QUESTIONNAIRE
ON EVALUATION OF INTERNAL CONTROL STRUCTURE

1. Name of Organization………………….

2: Participants   Name………………………

3. Participants Designation……………….

4. Does your company achieve each of the fallowing control objectives?

i)  Effectiveness and efficiency of operation

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

ii. Reliability of financial statements.

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

iii. Compliance with applicable laws and regulations

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Questions related to internal control environment:

Management philosophy and operation Style:

5. Does management emphasize short-term profits and operating goals to the detriment of long-term goals?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

6. Is the management group dominated by one or few individuals?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

7. Does the management take undue business risk to achieve its objectives?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

8. Is management aggressive toward selecting from available, alternative accounting principles?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Integrity and Ethical value:

9. Is there any written corporate code of conduct that establishes appropriate tone for management?

♦ Yes                                                    ♦ No

10. If yes, is management behavior restricted by the corporate code of conduct?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Commitment to competence:

11. Does your company recruit competent and trustworthy employees to encourage initiative and creativity and to react quickly to changing conditions?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Board of directors and audit committee:

12. Does your company appoint an audit committee that is composed entirely of outside (non-employee) directors?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

13. Does the audit committee work closely with the company’s board of directors, external and internal auditors?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

14. Does the audit committee provide an independent review of the actions of corporate managers on behalf of the company’s shareholders?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

15. Does the management proper action recommended in the audit report?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Organization Structure:

16. Is an up-to-date organization chart prepared showing the name of the key personnel?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

17. Is the information system function separated from incompatible functions?

ƒ♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

18. Are the team members empowered to make decisions who don’t seek- multiple layers of approval to complete their work?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

19. Is the internal audit function esparto and distinct from accounting?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Assignment of authority and responsibility:

20. Does the company prepare written employee job descriptions defining specific duties and reporting relationship?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

21. Is written approval required for changes made to information systems?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

22. Does the company properly delegate authority to employees and departments?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Human resources policies and practices:

23. Is there any written recruitment in your organization in what extent it is complied?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

24. Does your company have training program for new employees?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

25. Are new personnel given instructions with respect to internal controls, ethics and corporate code of conduct?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

26. Is there periodic rotation of duties among key employees?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Risk assessment component:

27. Does your company conduct risk assessment to identify analyze and prevent the risk to which your company is exposed?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Control activities component:

Proper authorization of activities:

28. Do the transactions and activities are properly authorized by the appropriate authorities?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Segregation of duties:

29. Do the authorization functions (Approving transaction and decision) are segregated?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

 30. Do the recording functions (Preparing source documents; maintaining journals, ledger or other files; preparing reconciliations and preparing performance reports) are properly segregated?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

31. Do the custodian functions (handling cash, maintaining inventor store room receiving incoming customer checks, writing organization bank accounts) are properly segregated?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Design and use of documents and records:

32. Do the formats and contents of all the documents are kept simple?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

33. Are the source document pre-numbered?

♦ ƒAll                ♦ ƒMost                ♦ ƒMore         ♦ Few             ♦ ƒNone

Adequate safeguard of assets and records:

34. Does your company maintain accurate-records of assets including information?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

35. Does your company restrict physical access to assets (Cash register, safes, and lock boxes) by the unauthorized users?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

36. Does your company protect records and documents (in fire proof storage area, locked filing cabinet, etc?)

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

37. Does your company restrict access to computer rooms, computer files and information by unauthorized users?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Independent checks on performance:

38. Does your company make reconciliation of two independently maintained sets of records (subsidiary Vs general ledger?)

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

Monitoring component:

39. Does your company have ongoing monitoring activities?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

40. Does your company separate monitoring activities?

♦ ƒAlways          ♦ ƒVery Frequently        ♦ ƒFrequently              ♦ ƒSeldom          ♦ ƒNever

 

Internal Control Questionnaire

Internal Control Questionnaire

Internal control questionnaire image given above to give idea about structure of internal control questionnaire. It may be in different format.

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