AUD 3 Internal Control 10 - 3 Flashcards
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
An auditor performs the following procedures to obtain and apply an understanding of internal control to an audit:
Step 1 – Obtain an understanding of the design of all 5 components of the entity’s internal control (CRIME) through the performance of risk assessment procedures.
Step 2 – Document the understanding of Internal Control.
Step 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).
RMM = IR × CR
Step 4 – Develop an audit strategy to either:
o (RELY?)
Perform tests of control (TofC) to determine if CR is below maximum, reducing RMM below the level of IR and allowing for the modification of the nature, timing, and extent of further audit procedures (sub tests): or
o (NOT Rely)
Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist, and measuring RMM as being equal to IR.
Step 5 – Reassess Risk of Material Misstatement and evaluate results.
o For controls for which tests of controls were performed, evaluate results to reassess RMM and determine if it is appropriate to modify the nature, timing, and extent of further audit procedures.
Step 6 – Document conclusions and determine the effect on the planned substantive procedures. At this point, the audit program needs to be developed or revised for further audit procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
An auditor performs the following procedures to obtain and apply an understanding of internal control to an audit:
Step 1 – Obtain an understanding of the design of all 5 components of the entity’s internal control (CRIME) through the performance of risk assessment procedures.
Step 2 – Document the understanding of Internal Control.
Step 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).
RMM = IR × CR
Step 4 – Develop an audit strategy to either:
o (RELY?)
Perform tests of control (TofC) to determine if CR is below maximum, reducing RMM below the level of IR and allowing for the modification of the nature, timing, and extent of further audit procedures (sub tests): or
o (NOT Rely)
Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist, and measuring RMM as being equal to IR.
Step 5 – Reassess Risk of Material Misstatement and evaluate results.
o For controls for which tests of controls were performed, evaluate results to reassess RMM and determine if it is appropriate to modify the nature, timing, and extent of further audit procedures.
Step 6 – Document conclusions and determine the effect on the planned substantive procedures. At this point, the audit program needs to be developed or revised for further audit procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The au_____ should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should per____ the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the r___ assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to i_____fy and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and as____ the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the r___s of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misst________
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement le___
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level a__ at the relevant assertion level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the rele_____ assertion level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant as_______ level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for cl___es of transactions,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of tran_______s,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, acc____ balances,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account balances,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account bal___es, and disclosures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account balances, and disclosures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account balances, and dis______es.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account balances, and disclosures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing R___ of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account balances, and disclosures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor should perform the risk assessment to identify and assess the risks of material misstatement at the financial statement level and at the relevant assertion level for classes of transactions, account balances, and disclosures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The aud_____ first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first ass____s risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses r___ of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of ma______ misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement le__
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the fin______ statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by eva______ng the entity’s ability to prepare financial statements
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the en___y’s ability to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s a____ty to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to pre____ financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are f___ly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly pr______ed
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in ac________e with the applicable financial reporting framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the applicable financial reporting framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the appl______ financial reporting framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the applicable financial reporting framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the applicable financial re____ing framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the applicable financial reporting framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the applicable financial reporting frame____.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level
by evaluating the entity’s ability to prepare financial statements that are fairly presented
in accordance with the applicable financial reporting framework.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include fa____s such as
the auditor’s perception of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s per_______ of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the com_______y of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s ac______ing personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting per_____el;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an eva________ of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the en___y’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to de_____ estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop est_____s and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and inter____ accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting prin____es;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the au_____ considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor con_____s management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers ma________ aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management agg_______ or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or bel_____s management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is un___ pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pre_____ to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achi___ difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve diff____ financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial g___s;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the ind_____ or the economy has created particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the eco____ has created particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has cr___ed particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular cha_____es;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the e____y is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is se__ing financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking fi_____ing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or an_____ting entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating en___ing into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a su_____tial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial trans_____.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level.
This will include factors such as
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor fi___ assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the comp____cy of the entity’s accounting personnel;
an eval_____ of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pres____ to achieve difficult financial goals;
if the ind____y or the economy has created particular challenges;
or if the entity is seeking fin____ing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are f___ly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s acc___ting personnel;
an evaluation of the entity’s ab____y to develop estimates and interpret accounting principles;
whether the auditor considers management aggre_____ or believes management is under pressure to achieve difficult financial goals;
if the industry or the eco___y has created particular challenges;
or if the entity is seeking financing or anticipating entering into a subs______ transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other fa____s may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may inc_____ the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the r___ that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, ta___ as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a wh___, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be mat______y misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially mis____ed.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
A__ of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as ……………..
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor first assesses risk of material misstatement at the financial statement level by evaluating the entity’s ability to prepare financial statements that are fairly presented in accordance with the applicable financial reporting framework.
This will include factors such as
the auditor’s perception of the competency of the entity’s accounting personnel;
an evaluation of the entity’s ability to develop estimates and interpret accounting principles;
whether the auditor considers management aggressive or believes management is under pressure to achieve difficult financial goals;
if the industry or the economy has created particular challenges;
or if the entity is seeking financing or anticipating entering into a substantial transaction.
Any of these or a variety of other factors may increase the risk that the financial statements, taken as a whole, will be materially misstated.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The aud____ may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a subs_____ approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive app___ch, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which subs______ procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive pro______es are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emp_____ed,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a com___ed approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which bo__ tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both t___s of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and subst_____ procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive pro______es are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are u__d.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized,
or a combined approach, in which both tests of controls and substantive procedures are used.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized, or a combined approach, in which both tests of controls and substantive procedures are used.
• The au_____ needs to
o Identify the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized, or a combined approach, in which both tests of controls and substantive procedures are used.
• The auditor needs to
o Identify the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor n___s to
o Identify the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized, or a combined approach, in which both tests of controls and substantive procedures are used.
• The auditor needs to
o Identify the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Id_____y the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized, or a combined approach, in which both tests of controls and substantive procedures are used.
• The auditor needs to
o Identify the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the r___s.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the id\_\_\_\_\_ied risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified r\_\_\_s to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Re\_\_\_\_ the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of pot\_\_\_\_\_ misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential miss\_\_\_\_\_\_\_\_s that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could oc\_\_\_at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the rel\_\_\_\_\_\_ assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant as\_\_\_\_\_\_\_ level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion le\_\_\_.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Con\_\_\_\_\_ whether the risks are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the r\_\_\_s are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so sig\_\_\_\_\_\_\_ that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could re\_\_\_\_ in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misst\_\_\_\_\_\_\_ of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likeli\_\_\_\_\_ (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (pro\_\_\_\_\_\_\_y) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified r\_\_\_s could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the id\_\_\_\_\_ied risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could re\_\_\_\_ in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in ma\_\_\_\_\_\_ misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Id\_\_\_\_fy the risks.
o Rel\_\_\_ the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
o Cons\_\_\_\_ whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Cons\_\_\_\_ the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, or a combined approach.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized, or a combined approach, in which both tests of controls and substantive procedures are used.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
The auditor may use either a substantive approach, in which substantive procedures are emphasized, or a combined approach, in which both tests of controls and substantive procedures are used.
• The auditor needs to
o Identify the risks.
o Relate the identified risks to the types of potential misstatements that could occur at the relevant assertion level.
o Consider whether the risks are so significant that they could result in a material misstatement of the financial statements.
o Consider the likelihood (probability) that the identified risks could result in material misstatements on the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the r___ assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk asse________ is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is b__ed on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expe_______ that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that con____s are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are ope___ing effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating eff_____ly,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the aud____ should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should t___ the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the op_____ng effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating eff_____ness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of con___s (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (T__C)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (T____)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been det______ed to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably de____ed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be su_____ly designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to pre____ or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or de____ material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect ma______ misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively,
the auditor should test the operating effectiveness of controls (TofC)
that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating eff______ly, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
• Intend to R___?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• In____ to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The r___ assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk asse_______ may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may N__ include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT inc____ an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an exp______n that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that co_____s operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate eff______y
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Sub______ approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inade\_\_\_\_ / Ineffective/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Inef\_\_\_\_\_/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ w\_\_\_.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Con\_\_\_\_s appear inadequate / Ineffective/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Au\_\_\_\_\_ believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor be\_\_\_\_\_\_s that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that per\_\_\_\_ing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing exte\_\_\_\_\_ substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive subst\_\_\_\_\_\_ procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be m\_\_\_ cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost ef\_\_\_\_\_\_ than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more c\_\_\_ effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective th\_\_ performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing t\_\_\_s of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of con\_\_\_\_. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Co\_\_/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/be\_\_\_\_\_ – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – ineffi\_\_\_\_\_).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC).
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the con____s appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear eff______, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, t___s of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of con____s will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be per____ed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Com___ed approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined app______):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The au____’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s r___ assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk asse_______ includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment in_____es an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expe_______ of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of op_____ing effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating eff_______ess of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of con____s
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likeli_____ of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misst_______ is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lo___ if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the con____ operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control ope_____s effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates eff______ly (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (C___ effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost eff_______)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• The auditor’s risk assessment includes an expectation of operating effectiveness of controls
because the likelihood of material misstatement is lower if the control operates effectively (Cost effective)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When subst______ procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive pro______es alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures al___ do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do n__ provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not pro____ sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide suffi_____ audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evid_____.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
• When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls ap____ effective, tests of controls will be performed when (Combined approach):
- The auditor’s risk assessment includes an expectation of operating effectiveness of controls because the likelihood of material misstatement is lower if the control operates effectively (Cost effective) or
- When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
If the controls appear effective, tests of controls will be performed when (Combined approach):
- The auditor’s risk assessment includes an expectation of operating effectiveness of controls because the likelihood of material misstatement is lower if the control operates effectively (Cost effective) or
- When substantive procedures alone do not provide sufficient audit evidence.
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
If the controls appear effective, tests of controls will be performed when (Combined approach):
- The auditor’s risk assessment includes an expectation of operating effectiveness of controls because the likelihood of material misstatement is lower if the control operates effectively (Cost effective) or
- When substantive procedures alone do not provide sufficient audit evidence.
If the risk assessment is based on an expectation that controls are operating effectively, the auditor should test the operating effectiveness of controls (TofC) that have been determined to be suitably designed to prevent or detect material misstatements.
• Intend to Rely?
The risk assessment may NOT include an expectation that controls operate effectively when (Substantive approach):
o Controls appear inadequate / Ineffective/ weak.
o Auditor believes that performing extensive substantive procedures is likely to be more cost effective than performing tests of controls. (Cost/benefit – inefficient).
If the controls appear effective, tests of controls will be performed when (Combined approach):
- The auditor’s risk assessment includes an expectation of operating effectiveness of controls because the likelihood of material misstatement is lower if the control operates effectively (Cost effective) or
- When substantive procedures alone do not provide sufficient audit evidence.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
Since t___s of controls alone are not normally sufficient upon which to base an audit opinion,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
Since tests of controls alone are not normally sufficient upon which to base an audit opinion,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
Since tests of con____s alone are not normally sufficient upon which to base an audit opinion,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
Since tests of controls alone are not normally sufficient upon which to base an audit opinion,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
Since tests of controls al___ are not normally sufficient upon which to base an audit opinion,
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315)
Step 3 –
3. Assessing Risk of Material Misstatement (RMM)
Since tests of controls alone are not normally sufficient upon which to base an audit opinion,
