Accounting and Internal Control Systems Evaluation and Audit Quality

ABSTRACT: This study is on the evaluation of accounting and internal controls systems of an organization andits effect on quality audit. The evaluation is to serve as a basis upon which the external auditor is to obtain basicknowledge of the systems and to decide whether or not to rely on them and to what extent of such reliance so asto ensure quality audit. Descriptive research design was employed to describe the basic processes involved inevaluating the systems. The outcome revealed a basic knowledge that the management is responsible for theestablishment and maintenance of an effective Accounting and Internal control system, but it is the duty of theexternal auditors to evaluate and ascertain the effectiveness of these systems in order to decide whether or not toplace reliance on the existing systems and to what extent would be such reliance. The basic processes involvedin the evaluation of the systems as well as the methods (Narrative Notes, Flowcharts, and Questionnaires) thatcould be employed were highlighted. Communication of the outcome of the evaluation to the appropriateauthority were also described and a conclusion drawn.

Keywords: Accounting System, External Auditor, Flowcharts, Internal Control System, Narrative Notes,Questionnaires and Reliance