Internal Control Questionnaire is a comprehensive series of questions concerning internal control. A company is engaged in business of manufacturing…
CA Intermediate · Auditing and Ethics · MTP · May 2024
Internal Control Questionnaire is a comprehensive series of questions concerning internal control. A company is engaged in business of manufacturing of chemicals. It has two plant locations in city “A” and one plant location in city “B” involving huge value of assets. Building at three locations is owned by the company. The company earns handsome profits and does not want to suffer losses due to business interruptions. It has a dedicated department for looking after insurance matters. As an auditor, prepare an internal control questionnaire concerning this department for obtaining staff responses.
Suggested Answer and Working Notes:
Internal Control Questionnaire Are competitive quotes obtained from different insurers?Is comprehensive insurance cover obtained for fire, flood, burglary, earthquake risks etc.?Are all three locations in city A and B covered?Are all assets consisting of building, plant & machinery and inventories covered?Is there an adequate procedure to ensure that assets acquired between two renewal dates are also covered by insurance?Is there an official who decides on value for which policies are taken?Does officer who decides on policy value review periodically adequacy of insurance cover?Is loss-of-profits insurance cover taken?Have there been any instances of rejection of claims?Are pending claims followed-up with insurers?
Topics: Risk Assessment and Internal Control
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