Which of the following statements is true regarding internal control questionnaires (ICQs)?

A. ICQs are most useful in more organic, decentralized organizations with specialized departmental or regional characteristics:ICQs are standard tools and can be used in a variety of organizational structures, not just decentralized ones.

B. An ICQ can be used effectively either by sending it in advance for management of the area under review to complete or by testing each procedure and recording the results:Correct. ICQs are versatile tools that can be used for both self-assessment by management and as part of a detailed audit procedure.

C. An ICQ is not an efficient tool, as it can only inquire about controls and it does not test them:ICQs can test controls indirectly by revealing whether they are documented and applied properly.

D. ICQs are also known as checklist audits and encourage management of the area under review to answer "no" or "yes" more accurately:ICQs are not limited to a checklist format and their value goes beyond simple yes/no answers.

CIA Exam Syllabus Reference:

Domain V: Performing Internal Audit Services – Tools for Assessing Internal Controls.