pathfinder - The Institute of Chartered Accountants of Nigeria

PATHFINDER(iii)(iv)(v)(vi)(vii)The potential for human error due to carelessness, distraction, mistakesof judgment and misunderstanding of instructionsThe possibility of circumvention of internal controls through collusionwith parties outside or inside the entityThe possibility that a person responsible for exercising authority oninternal control could abuse that responsibility, for example byoverriding internal controlThe possibility that procedures may become inadequate due to changesin conditions or that compliance with procedures may deteriorate overtime.Pressure expected from within and outside the organization caninfluence the integrity and competence of staff.(c)Concerning Corporate Governance, the functions of the Board include:(i) Strategic planning(ii) Selection, performance appraisal and compensation of seniorexecutives.(iii) Succession planning(iv) Communication with shareholders(v) Ensuring the integrity of financial controls and reports(vi) Ensuring that ethical standards are maintained and that the company ororganization complies with the laws of the land.EXAMINERS‟ REPORTThe question is in three parts (a) to (c).Part (a) and (b) test candidates on internal controls while part (c) tests on CorporateGovernance.About 80% of the candidates attempted the question and about 50% of them scoredpass mark.The commonest pitfall in answering the question is substituting “internal auditor‟sfunctions” for “purposes of internal control”. Candidates are advised to prepareadequately for the examination.INTERMEDIATE EXAMINATION - NOVEMBER 201052