Difference between test of design & test of operating effectiveness in internal control

Question

Accepted Answer

Test of design checks if control is designed effectively while test of operating effectiveness checks if control is working as intended.

Test of design evaluates the design of internal control to ensure it is effective in achieving its objectives.
Test of operating effectiveness evaluates whether the internal control is operating as intended and achieving its objectives.
Test of design is performed before the implementation of internal control while test of operating effectiveness is performed after the implementation of internal control.
Test of design is a preventive control while test of operating effectiveness is a detective control.
Example of test of design: reviewing policies and procedures to ensure they are designed to prevent errors or fraud. Example of test of operating effectiveness: observing employees to ensure they are following the policies and procedures.

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