Which of the following is the primary weakness of internal control questionnaires (ICQs)?
A.
ICQs do not allow for open-ended questions.
B.
ICQs do not allow for evaluating multiple locations.
C.
ICQs require significant auditor follow-up, as different managers may give different responses.
D.
ICQ respondents have incentives to answer that there are internal controls in place.
The Answer Is:
D
This question includes an explanation.
Explanation:
The primary weakness of internal control questionnaires (ICQs) is that the respondents, who are often managers or personnel responsible for specific areas, may have incentives to indicate that internal controls are in place, even when they might not be effective or fully operational. This can occur due to a desire to present their department in a positive light, avoid scrutiny, or because of misunderstandings about what constitutes a control. This bias in responses can lead to inaccurate assessments of the internal control environment.
IIA References:
IIA Standard 2310: Identifying Information and its accompanying guidance highlight the importance of obtaining accurate, reliable, and unbiased information when assessing controls. The potential for biased responses in ICQs is a known risk that can undermine the quality of the audit evidence gathered.
The Practice Guide on Evaluating Internal Controls notes that while ICQs are useful for gathering information, auditors should be aware of the limitations and potential biases inherent in this method.
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