What does general controls mean on the CPA exam?
General controls. Controls over the IT environment as a whole -- access, change management, operations -- that everything else depends on. If they fail, no application control can be relied on.
Defined against AU-C 315.12.
Which CPA exam sections use general controls?
General controls appears in the AUD section of the CPA exam.
Other terms defined against AU-C 315
- application controls: Controls built into one business process or system, such as a validity check on an input field or a three-way match.
- assessed risk: The auditor's judgment about the risk of material misstatement at the assertion level, combining inherent and control risk.
- control environment: The governance and management functions and the attitudes, awareness, and actions of those charged with governance and management concerning the entity's system of internal control.
- general IT control: A control over the entity's IT processes that supports the continued effective functioning of information-processing controls and the integrity of information.
- information and communication: One of the five components of internal control: how an entity obtains the information it needs and gets it to the people who have to act on it.
- information-processing control: A control over processing in an IT application or a manual information process that directly addresses a risk to the integrity of information.
- rights and obligations: The assertion that the entity genuinely owns the assets it reports and genuinely owes the liabilities.
- risk assessment procedures: The audit procedures designed and performed to identify and assess the risks of material misstatement at the financial statement and assertion levels.
Other names for general controls
IT general controls, ITGC
Related terms
- complementary user entity controls: Controls a service organization assumes its customers are running.
- service organization: A third party whose processing affects a user entity's financial reporting, such as a payroll bureau or a claims processor.
- management override: Management using its authority to bypass controls that otherwise work.