During an entity-level controls assessment, internal auditors deploy an internal control questionnaire to test the controls. Which of the following is a major drawback of this testing method?

Question

Options

• AInformation obtained by this method can be repudiated.
• BInformation obtained by this method is difficult to quantify.
• CIt is an inefficient method of gathering evidence.
• DLimited information can be gathered with this method.

• A
  87% (13)
• C
  7% (1)
• D
  7% (1)

Explanation

An internal control questionnaire (ICQ) is a commonly used tool in the assessment of entity-level controls. It is a structured set of questions that auditors use to gather information about the controls in place within an organization. However, while this method can be efficient for gathering broad-based information, it has certain limitations, one of the most significant being that the information obtained can be repudiated. Repudiation refers to the possibility that the information provided by respondents can be denied or questioned later. This is a key drawback because the responses in an ICQ are typically self- reported and may not be fully accurate or reliable. Respondents may either misunderstand the questions or provide answers that are overly optimistic, biased, or not fully truthful. This can compromise the reliability of the evidence gathered through this method.

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