2- internal control standards

Question 1

auditor responsibility

an auditor should asses rmm at the

Answer 1

financial statement level

relevant assertion level

Question 2

when assessing the risk of RMM the auditor must take into account

Answer 2

auditor responsibility
internal control considerations
significant risks
risks for which substantive procedures alone do not provide sufficient appropriate audit evidence
revision of risk assessment

Question 3

overall response to assessing rmm at the f/s level

Answer 3

auditor may assign more experienced staff
provide closer supervision
assign specialists
more unpredictable audit procedures
make changes in nature timing extent of procedures etc

may change auditors approach and use a more substantive or reliant approach or combined approach

Question 4

overall response to assessing rmm at the assertion level

Answer 4

the assessment of the rmm may affect auditors decision of nature, timing extent of further audit procedures

Question 5

nature
timing
extent

Answer 5

nature-refers to the purpose of further audit procedures (substantive or test of controls) and type (inspection, observation, inquiry etc)

timing-when the procedures are performed (before yr end-interim or year end) year end is usually more effective with a higher risk of ram

extent-quantity of audit procedure to be performed (ex sample size). caats (computer assisted audit techniques) can be very effective in this area.