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Checklist for Evaluating Internal Controls
Internal control evaluation checklists are meant to help a company assess the structure within the organization. An effective internal control guarantees the integrity of financial reporting. There are five components of an internal control system, which include: control environment, risk assessment, control activities, information and communication, and monitoring. Not only are there five components, but there are three phases, understanding, assessment, and testing. This checklist helps to assure that control objectives are achieved with cost-benefit consideration. Auditors will need to consider the five components within the three phases of the internal control evaluation.
Below is a sample checklist for the internal control of a company:

Client Name ____________________________________________________________

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Prepared by ____________________________________________________________

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Date Prepared ____________________________________________________________

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Internal Control Checklist
Phase I
Understanding Internal Controls

Control Environment:

1. Do employees clearly understand the mission of the organization?
2. Do employees understand their objectives?
3. Do employees clearly understand what they are accountable for?
4. Are the principles of integrity and ethical values shared and practiced by all?
5. Is a current organizational chart maintained and followed?

Risk Assessment:
6. Does the organization understand the risk they need to control, as well as the degrees of risks?
7. Does management take an interest in making sure they gather the correct information?
8. Does the company/management update the risk assessment on a continual basis?
9. Does each department maintain their own risk assessment and is it reviewed by management?...

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