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Control Environment Questions

CCH Audit Automation
Last update: Reading time 2 minutes
Master PacksSystem AdministrationSQL Server
    CCH Audit Automation allows the control risk for a client to be assessed either by asking a series of control risk questions, or by using a single set of proprietorial controls which will allow you to assess if such control is being exercised.

    CCH Audit Automation allows the control risk for a client to be assessed either by asking a series of control risk questions, or by using a single set of proprietorial controls which will allow you to assess if such control is being exercised.  In addition, it is also possible to allow the user to enter the level of reliance being placed on controls after assessing these away from the computer.

    To edit the list of control environment questions, load the pack for editing and click on the Control environment option within Risk Model in the Master options list. 

    The system will display the Control environment dialog which contains a list of the first lines of the questions currently defined.
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    Control environment dialog

    This list can be scrolled using the scroll bar, or the navigation buttons, and a question selected by clicking on its first line. Up to 99 questions can be defined and they are added, edited and deleted as described for the Inherent Risk Questions.

    When you create or edit the first control environment question, an Overall control question option is included in the dialog. If this option is checked, then the answer to this question is used to determine whether or not the remaining control environment questions are required.

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    Editing Question 1 in the Control environment

    The system can arrive at a decision as to whether or not controls are being exercised, and therefore allows the level of control risk to be defined where they are being exercised. Details of how the table operates, and how to edit it, are contained Inherent Risk Questions of this manual.

    Related documents

    Inherent Risk Questions
    This document outlines the process for assessing inherent risk in clients through a systematic approach of questions. The system can store up to 99 risk areas, each containing 99 questions, which are assigned point scores for "Yes" and "No" answers. It details steps for editing, adding, and deleting risk areas and questions, including interface navigation and confirmation prompts. Additionally, it emphasizes that once numbers are assigned to risk areas or questions, they cannot be changed. The document serves as a guide for managing inherent risk assessments effectively.
    Audit Risks
    This document details the functionality of CCH Audit Automation for recording Identified Audit Risks, also referred to as Significant Business Risks. It provides instructions for users to add, edit, and manage risks, including features for maintaining risks for future audits, assessing their significance, and linking them to assertions. The system includes tools for risk assessment, audit response, and documenting conclusions. Other functionalities encompass risk summarization, printing options, and risk linkage across multiple sources, enhancing the audit process's efficiency and accountability.
    Default Specific Risk Questions
    CCH Audit Automation allows users to define specific risk questions for audit areas, although it's not mandatory. If no specific questions are set, default questions will be used. Users can edit the default questions through the "Specific risk questions" option in the Risk Model section. Up to 99 default questions can be defined, similar to inherent risk questions. The system utilizes a lookup table that combines specific and inherent risks for audits, with editing instructions provided in the manual.
    Risk/Sample Selection
    This document outlines the concept of audit risk, defined as the likelihood of undetected material errors during an audit. It introduces a risk model used in Audit Automation that requires total audit risk to remain below acceptable levels across various audit areas. The risks are broken down into inherent risk, control risk, and detection risk, with further subdivisions for detection risk. It emphasizes the importance of understanding these concepts to design effective audit procedures and assess risk at different levels. Additionally, it discusses general and control environments, and the calculation of residual risk, alongside a risk scoring system.
    Inherent Risks
    The document outlines the procedure for addressing inherent risk questions in an audit context. Users can access a dedicated window to view up to 99 risk areas, answer questions, and modify responses as necessary. The system prompts users to validate changes to ensure proper risk assessments. It includes functionalities for viewing prior comments, copying text, and overriding calculated risk levels, emphasizing that auditor judgment is crucial. Comments on overrides must be provided to rationalize any adjustments made. The document serves as a guide for navigating and utilizing the auditing software effectively.