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The question I have posted can assure you of a good internal control system
The major factors to consider in assessing and evaluating the internal control system in clients environment are:
♦ The size of the entity.
♦ The nature of the entity’s business, including its organisation and ownership characteristics.
♦ The diversity and complexity of the entity’s operations.
♦ Applicable legal and regulatory requirements.
♦ The circumstances and the applicable component of internal control.
♦ The nature and complexity of the systems that are part of the entity’s internal control, including the use of service organisations.
♦ Whether, and how, a specific control, individually or in combination with others, prevents, or detects and corrects, material misstatement.
♦ Materiality.
♦ The significance of the related risk.
The main factors are:
- The relationship between the customers of the company?
- Delays in their payment?
- Are service companies, the admainistration, individuals, traders, others companies?
- The links of dependencies between the business and its customer?
- Are the risks spread over many customers?
- Customer behavior?
- The relationship between the needs and the product sold
- Are customers stable?
- Is the market saturated?
- The customer purchasing power
- The geographical distribution of customers
- Is customer concentrated or dispersed?
- Does the customer belongs to several economic sectors?
- Customers do they pay with regularity and punctuality?
