Internal Control Questionnaires (ICQs)
An Internal Control Questionnaires (ICQ) is an efficient, structured tool used by internal auditors to evaluate the existence and effectiveness of internal controls within an organization. ICQs would contain a series of targeted questions designed to assess risk, compliance, and operational effectiveness in specific business processes, such as procurement, payroll, inventory, and IT.
ICQs may help auditors identify gaps in controls, detect potential fraud, and validate management’s assertions. They are often completed during the planning or fieldwork phase of an audit to determine whether key control procedures are in place and functioning as intended. The questions typically require “Yes,” “No,” or “Not Applicable” responses, supported by documentation or walkthrough evidence.
Best practices recommend that ICQs be tailored to the audited area, kept current with evolving risks and regulations, and used alongside other audit techniques (e.g., interviews, observations, and tests of controls). While ICQs are useful for gathering information efficiently, they should not be the sole source of evidence.
Internal Control Questionnaire (ICQ) Quiz – 10 MCQs
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What is the primary purpose of an ICQ?
A. Budgeting
B. Evaluating internal controls
C. Writing audit reports
D. Creating audit charters -
ICQs typically include questions that are:
A. Open-ended and essay-style
B. Vague and philosophical
C. Yes/No/Not Applicable format
D. Only financial in nature -
When should ICQs be used during an audit?
A. Only at the end
B. During planning or fieldwork
C. After report issuance
D. During staff meetings -
An auditor receives “Yes” to all ICQ questions but finds control failures. What does this suggest?
A. ICQ is flawed
B. Management misunderstood questions
C. Auditing should be skipped
D. The audit can close early -
How should ICQ answers be supported?
A. Guesswork
B. Documentation and walkthroughs
C. Personal opinions
D. Verbal assurances only -
ICQs are most effective when they are:
A. Generic and unchanging
B. Tailored to the audit area
C. Used without other tools
D. Only reviewed annually -
Which of the following is a common limitation of ICQs?
A. Excessive length
B. Over-reliance without testing
C. Too many stakeholders
D. Used by external auditors only -
ICQs help assess:
A. Control design and implementation
B. Future profit forecasts
C. Tax liabilities
D. Recruitment effectiveness -
What should auditors do if ICQ responses are inconsistent with field evidence?
A. Trust the ICQ
B. Ignore discrepancies
C. Investigate further
D. Cancel the audit -
ICQs align with which internal auditing framework?
A. GAAP
B. COSO
C. IPPF
D. IFRS
Answer Key:
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B 2. C 3. B 4. B 5. B
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B 7. B 8. A 9. C 10. C