Internal Control Questionnaire to Evaluate Internal Control Structure

An internal control structure is a key function of a business organization. An internal control questionnaire can bring a perfect picture of the internal control structure. So, we provide an internal control questionnaire to evaluate the 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 following control objectives?

i) Effectiveness and efficiency of operation

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

ii. Reliability of financial statements.

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

iii. Compliance with applicable laws and regulations

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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?

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Integrity and Ethical value:

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

  1. Yes
  2. No

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Commitment to competence:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Board of directors and audit committee:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Organization Structure:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Assignment of authority and responsibility:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Human resources policies and practices:

23. Is there any written recruitment in your organization to what extent it complies?

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Risk assessment component:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Control activities component:

Proper authorization of activities:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Segregation of duties:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Design and use of documents and records:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

33. Are the source document pre-numbered?

  1. All
  2. Most
  3. More
  4. Few
  5. None

Adequate safeguard of assets and records:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Independent checks on performance:

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

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Monitoring component:

39. Does your company have ongoing monitoring activities?

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

40. Does your company separate monitoring activities?

  1. Always
  2. Very Frequently
  3. Frequently
  4. Seldom
  5. Never

Internal Control Questionnaire

Internal Control Questionnaire

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

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