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CA Ravi Taori
2. Questions: Although the check list typically contains questions pertaining to the primary control objective
with the area under review, the ICQ includes a large number of detailed questions
3. Weakness Indication: In the ICQ, a "No" response indicates a weakness, but the significance of that weakness
is not automatically revealed. On the other hand, the checklist requires a specific statement when an apparent
weakness may be material to the overall accounts.

(CNO-MRI.580) Flow chart
Definition
It is a graphic presentation of each part of the company's ICS.
Advantage:
• Most concise way of review
• Minimise amount of narrative explanation
• Birds Eye View of system, flow of transaction & Integration
• Easy to spot deficiencies & suggest improvement
A properly drawn up flow chart can provide a neat visual picture of the whole activities of the section or
department involving flow of documents and activities. More specifically, it can show-
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Visual Clarity: A well-constructed flow chart provides a clear visual representation of the entire activities of a
section or department, including the flow of documents and activities.
Record Management: It can also illustrate the filing of documents and their final disposal, whether by sending
out or destruction.
Expertise Requirement: A sound understanding of internal control requirements is crucial for using flow-
charting technique for evaluating internal controls. It also requires a highly analytical mind to clearly see the
division of a job and the appropriate control at relevant points.
Authorization & Distribution: The flow chart can show the distribution of documents to various sections,
departments, or operations, and the checking of authorization and matching at relevant stages.
Document Tracking: It can depict the point at which a document is created internally or received from external
sources, the number of copies made, and the sequential stages through which the document and activity pass.
Section-wise Charts: Flow charts should be created section-wise or department-wise to ensure readability and
intelligibility.
Drawing of a flow chart -
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Symbolic Representation: A flow chart symbolically represents the flow of activity and related documents from
origin to conclusion. It links main functions like sales, purchases, wages, and production with related functions
to create a complete course.
Linking Functions: Functions such as purchases are linked with trade payables and payments, and sales with
trade receivables and collections. This makes the flow chart self-contained, complete, and meaningful for
evaluating internal controls.
Chart Orientation: A flow chart is typically horizontal, with documents and activities flowing from one section
to another. The sections are represented as vertical column heads, and in some cases, individuals can also be
represented as such.
Transaction Flow: The first column head should represent the section or individual where a transaction
originates, with subsequent column heads placed in the order of the actual transaction flow.

Questionnaire Integration: A questionnaire is often included with a flow chart, containing questions whose
answers can be found within the flow chart. This allows for an evaluation of the control system through flow

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