ACCA Advanced Audit and Assurance (AAA) Practice Exam

What is a common feature of the design of ICEQs?

1. They cover all aspects of accounting systems.

2. They simplify control criteria into key questions.

3. They focus on less significant controls.

4. They rely solely on qualitative data.

The correct answer is: They simplify control criteria into key questions.

The design of ICEQs (Internal Control Evaluation Questions) indeed commonly features the simplification of control criteria into key questions. This approach enables auditors and professionals to focus on the most critical aspects of internal controls, making it easier to assess the effectiveness of those controls. By distilling comprehensive control standards into succinct questions, ICEQs facilitate a more streamlined evaluation process. This method enhances clarity and ensures that the assessment is practical and manageable, allowing for a focused inquiry into whether controls are functioning effectively. In contrast to the correct choice, covering all aspects of accounting systems may lead to complexity and redundancy, making it less effective for evaluation purposes. Focusing on less significant controls can detract from the overall assessment and may result in overlooking vital aspects that could lead to material misstatements. Lastly, relying solely on qualitative data might not provide a comprehensive view of the effectiveness of controls, as a combination of qualitative and quantitative measures is often necessary to accurately assess internal controls.