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What is the Difference Between a Control and a Process in Audit?

Published in Auditing 2 mins read

A control in an audit refers to a specific action or procedure designed to mitigate risks and ensure the accuracy and reliability of financial records, while a process encompasses a series of interconnected steps or activities that are performed to achieve a specific business objective.

Understanding the Difference:

  • Control: A control acts as a safeguard, a mechanism to prevent or detect errors and fraud. Think of it as a safety net.
  • Process: A process is the overall workflow or series of actions that a company undertakes to complete a task or achieve a goal.

Examples:

  • Control: A control might be a two-person authorization rule for approving large purchases, ensuring that two individuals review and approve the transaction.
  • Process: The overall process of purchasing goods might include requisitioning, vendor selection, order placement, receiving, and payment.

Key Differences:

Feature Control Process
Purpose Prevent or detect errors and fraud Achieve a business objective
Scope Specific action or procedure Series of interconnected steps
Focus Risk mitigation Efficiency and effectiveness
Example Two-person authorization for large purchases Purchasing process from requisition to payment

Practical Insights:

  • Auditors evaluate controls to assess the effectiveness of a company's internal control system.
  • By understanding processes, auditors can identify potential control weaknesses and areas for improvement.

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