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CS Professional · Internal and Forensic Audit · Internal Audit Tools and Techniques

While reviewing the payroll cycle at Sundaram Pharma Ltd, an auditor uses an internal control questionnaire (ICQ) framed so that every 'No' answer points to a possible control weakness. What is the main advantage of framing the questions this way?

Framing the ICQ so that a 'No' signals a weakness lets the auditor identify control gaps directly from negative responses and focus further testing on them. It does not replace testing of controls, guarantee fraud detection, or shift responsibility for controls to the auditor.

  1. AIt removes the need to test any controls later
  2. BIt lets weaknesses be identified directly from the negative responsesCorrect
  3. CIt guarantees that fraud will be detected
  4. DIt transfers responsibility for controls to the auditor

Explanation

In a standard ICQ, questions are worded so that a 'Yes' signals a good control and a 'No' signals a weakness. The auditor can then quickly isolate the weak areas and focus further work on them. An ICQ records the system but does not replace testing, and it cannot guarantee fraud detection.

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