Internal control questionnaires and internal control evaluation questionnaires

Advantages: 1) If drafted thoroughly, they can ensure all controls are considered. 2) They are quick to prepare. 3)They are easy to use and control. 4)Because they are drafted in terms of objectives rather than specific controls, ICEQs are easier to apply to a variety of systems than ICQs. 5)Answering ICEQs should enable auditors to identify the key controls which they are most likely to test during control testing. 6)ICEQs can highlight deficiencies where extensive substantive testing will be required.

Disadvantages: 1) The principal disadvantage is that they can be drafted vaguely, hence misunderstood and important controls not identified. 2) They may contain a large number of irrelevant controls. 3)They may not include unusual controls, which are nevertheless effective in particular circumstances. 4) They can give the impression that all controls are of equal weight. In many systems one NO answer (for example lack of segregation of duties) will cancel out a string of YES answers. 5)The client may be able to overstate controls.

Checklists

Checklists may be used instead of questionnaires to document and evaluate the internal control system. The subtle difference with these is that, instead of asking questions, statements are made to 'mark off' and tick boxes are used to indicate where the statement holds true. For example, a checklist may state 'Supplies are examined on arrival as to quantity and quality' which would be ticked if this does actually occur, or crossed if not. Checklists share many of the same advantages and disadvantages of ICQs and ICEQs.