An Internal Control Evaluation Tool For The Construction Industry

Abstract

This paper presents a Control Objectives Reconciliation, a tool that independent auditors of clients in the construction industry should find useful in performing a preliminary evaluation of the client’s internal control system. Auditors are advised to compare their client’s control objectives with those presented in Exhibits 1 through 7. Where the client’s system appears to omit significant control objectives, the auditor should consider the risks brought on or magnified by the omission during the preliminary evaluation of the client’s internal control system. The Control Objectives Reconciliation is also potentially useful to Construction Company CFOs or Controllers who may be concerned about the adequacy of their company’s internal control system. The Reconciliation also highlights for Construction Company CFOs or Controllers those internal controls deemed to be important to their external, independent auditors.