Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Report on Internal Financial Control over Financial Reporting

Under the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by ICAI, which of the following is one of the five components of internal control that the auditor evaluates?

Control environment is one of the five components of internal control: control environment, risk assessment, control activities, information and communication, and monitoring. The other options are specific activities or policies, not recognised components of the framework used for evaluating internal financial controls over financial reporting.

  1. AControl environmentCorrect
  2. BStatutory register maintenance
  3. CBudgetary variance reporting
  4. DDividend distribution policy

Explanation

The framework of internal control recognises five components: control environment, risk assessment, control activities, information and communication, and monitoring. Statutory registers, budget variances and dividend policy are not named components, though they may be part of specific controls.

Did you get it right without looking?

One question tells you little. A timed set on Report on Internal Financial Control over Financial Reporting shows your real accuracy, how long you take and where you lose marks.

Practise Report on Internal Financial Control over Financial ReportingFree diagnostic mock

More Report on Internal Financial Control over Financial Reporting questions