Ask Joey ™ a Question

Does the audit team assess the efficiency of internal controls?

The audit team will obviously assess internal controls, but do they care about whether the internal controls help the business run efficiently?


For purposes of the audit, the answer is likely “No”. However, the external audit team could provide some value to the company and offer suggestions on how they could add some efficiency to the system of internal controls.

Ultimately, the audit team is primarily concerned about whether the internal controls are effective. To be more specific, this addresses whether the controls are designed, implemented, and operating effectively!


You might also be interested in...

  • Cash vs accrual – Interest Payable and Interest Expense

    Why is there a difference under the cash basis and accrual basis for interest? This article focuses on cash versus the accrual basis for interest, which includes interest paid in cash, interest expense under US GAAP, and interest payable. The main reason that there is a difference between cash and accrual for interest is that […]

  • How to solve for cash outflow for dividends?

    If you are trying to solve for the actual cash outflow for dividends for a period, then you need to use the balance sheet approach. The balance sheet approach is great for solving cash to accrual and accrual to cash problems. As you can see below, the balance sheet approach always uses the beginning and […]

  • What are the fundamental qualitative characteristics of financial statements?

    There are two primary qualitative characteristics and their components. You are expected to understand the fundamental qualitative characteristics and the enhancing characteristics. Both characteristics should be present in order for financial information to be useful to readers. The two fundamental characteristics to remember are relevance and faithful representation. Relevance: Key Components Financial information is relevant […]