Audit Firm Manuals and Audit Experts’ Approaches to Internal Control Evaluation

O’Leary, Conor, Iselin, Errol, & Sharma, Divesh (2006) Audit Firm Manuals and Audit Experts’ Approaches to Internal Control Evaluation. International Journal of Accounting, Auditing and Performance Evaluation, 3(1), pp. 20-40.


Internal control evaluation is a crucial component of the external audit process. This study investigates what practicing auditors consider to be good methods of internal control evaluation. It then compares these to the current Australian auditing standard (AUS 402). A review of audit methodologies of three of Australia’s largest firms, and interviews with five audit experts were conducted. The results demonstrated a shift towards a ‘business risk’ approach as opposed to the former ‘systems based’ approach to internal control evaluation. AUS 402 does not always reflect the modern practice, particularly in relation to the significance of individual elements of internal control and may be in need of revision, if professional pronouncements are to be viewed as in line with practice.

Impact and interest:

2 citations in Scopus
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ID Code: 4903
Item Type: Journal Article
Refereed: Yes
Additional URLs:
Keywords: Auditing, internal control evaluation, firm manuals, audit experts, auditing standards, components of internal control
ISSN: 1740-8016
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2006 Inderscience
Copyright Statement: Reproduced in accordance with the copyright policy of the publisher.
Deposited On: 04 Sep 2006 00:00
Last Modified: 08 Apr 2015 04:28

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