PQR Ltd. is a manufacturing entity. During the audit, the auditor evaluated internal controls relating to safeguarding of assets and noted the…
CA Intermediate · Auditing and Ethics · MTP · May 2026
PQR Ltd. is a manufacturing entity. During the audit, the auditor evaluated internal controls relating to safeguarding of assets and noted the following: Password-protected access to systems handling cash disbursements.CCTV surveillance in warehouses to prevent theft of inventory.Controls to restrict excessive consumption of raw materials in production.Maker-checker authorization for bank payments. The auditor intends to rely only on those controls relevant to the financial statement audit. Which of the following is the most appropriate set of controls relevant to the auditor's consideration?
Suggested Answer and Working Notes:
Correct Answer: Option (B)
Controls 1 and 4 only, since they directly impact financial reporting reliability
Topics: Risk Assessment and Internal Control
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