internal control testing controls testing test of controls

Insightful Tests of Controls

Internal control systems are the backbone of an organization’s financial operations, which is why it is so important to conduct control testing to determine their effectiveness in an audit. CKH Group can conduct control testing as part of an agreed-upon procedure engagement, ensuring your controls can be trusted.

As a leading CPA firm based in Atlanta, we take pride in offering Internal Control Testing designed to:

    • Help determine your financial reporting accuracy
    • Reduce risk or costly errors
    • Provide timely, efficient, and compliant results

What Is Control Testing?

Controls Testing or ‘Tests of Controls’ refers to an audit procedure that determines the effectiveness of controls used by a client to prevent and detect material misstatements. These procedures usually form part of a full audit but can be a single service as part of agreed-upon procedures engagements. In an audit, the results of a controls test may determine if the auditors choose to rely upon a client’s system of controls as part of their auditing activities.

General Classifications for Tests of Controls

There are several different types of controls testing, which can follow these general classifications:

Reperformance Classification – In this test, an auditor will initiate a new transaction to assess which controls are present and measure their effectiveness.

Observation Classification – In this test, an auditor will observe a business process in action and the control elements of the process.

Inspection Classification – In this test, auditors will examine business documents for approval signatures or stamps that indicate controls procedures have been performed as designed. This is usually done on a sample of documents related to transactions occurring throughout the year.

Substantive Testing vs Control Testing

Should control testing prove that the client’s controls are weak, substantive testing can be used instead, though this can increase the complexity (and therefore cost) of an audit. This testing is another type of audit procedure that examines the financial statements and supporting documentation to identify if they contain errors. There are many substantive tests that an auditor can use, but the testing is likely to include confirmation of account balances with third parties, recalculating calculations made by the clients, and observing transactions being performed.

Eon van Wyk CFO

Why Choose CKH Group?

CKH Group’s Assurance Services are designed to empower organizations with confidence in their financial reporting and decision-making.

With CKH Group, you’re not just getting a CPA firm; you’re gaining a trusted partner committed to your success. Discover the CKH Group advantage, where excellence, integrity, and expertise come together to create a powerful assurance partnership for you. Contact us today to explore how our External Audits can add value to your organization.

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Internal Control Testing