Explain the different techniques used in review of internal control system.

The different techniques used in review of internal control system are as under: Narrative record - It is a complete and exhaustive description of the system as found in operation by the auditor. Actual testing and observation are necessary before such a system is in operation and would be more suited to small business. Check list - A check list is a series of instruction and or answer. When he completes instruction, he initials the space against the instruction. Answers to the check list instruction are usually yes, No or not applicable. This is again an on the Job requirement and instructions are framed having regard to the desirable element of control. Questionnaire - It is a comprehensive series of questions concerning internal control. This is the most widely used from for collecting information about the existence operation and efficiency of internal control in an organisation. The questionnaire is annually issued to the client and the client is requested to get it filled by the concerned executives and employees. If on a perusal of the answers, inconsistencies or apparent incongruities are noticed, the matter is further discussed by auditor's staff with the client employees for a clear picture. The concerned auditor then prepares a report of deficiencies and recommendation for improvement. Flow Chart - It is a graphical presentation of each part of the company's system of internal Controls.