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AUD 3 Internal Control 10 - Understanding the Internal Control Structure Flashcards

1
Q

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:

Step 1 – Obtain an understanding of the design of all 5 components of the entity’s internal control (CRIME)

Step 2 – Document the understanding of Internal Control

Step 3 – Assess Risk of Material Misstatement (RMM)
RMM = IR × CR

Step 4 – Develop an audit strategy to either:
o RELY
or
o NOT Rely

Step 5 – Reassess Risk of Material Misstatement (RMM) and evaluate results.

Step 6 – Document conclusions and determine the effect on the planned substantive procedures.

A

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:

Step 1 – Obtain an understanding of the design of all 5 components of the entity’s internal control (CRIME)

Step 2 – Document the understanding of Internal Control

Step 3 – Assess Risk of Material Misstatement (RMM)
RMM = IR × CR

Step 4 – Develop an audit strategy to either:
o RELY
or
o NOT Rely

Step 5 – Reassess Risk of Material Misstatement (RMM) and evaluate results.

Step 6 – Document conclusions and determine the effect on the planned substantive procedures.

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2
Q

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)

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
              CR below maximum
                   or
           o NOT Rely
               NOT to perform tests of controls
               Set Maximum CR

Step 5 – Reassess Risk of Material Misstatement (RMM) and evaluate results.

Step 6 – Document conclusions and determine the effect on the planned substantive procedures.

A

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)

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
              CR below maximum
                   or
           o NOT Rely
               NOT to perform tests of controls
               Set Maximum CR

Step 5 – Reassess Risk of Material Misstatement (RMM) and evaluate results.

Step 6 – Document conclusions and determine the effect on the planned substantive procedures.

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3
Q

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.

A

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.

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4
Q

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 und_______ing of the design of all 5 components of the entity’s internal control (CRIME) through the performance of risk assessment procedures.

A

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.

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5
Q

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 de____ of all 5 components of the entity’s internal control (CRIME) through the performance of risk assessment procedures.

A

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.

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6
Q

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 com________s of the entity’s internal control (CRIME) through the performance of risk assessment procedures.

A

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.

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7
Q

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 en___y’s internal control (CRIME) through the performance of risk assessment procedures.

A

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.

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8
Q

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 in______ control (CRIME) through the performance of risk assessment procedures.

A

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.

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9
Q

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 con____ (CRIME) through the performance of risk assessment procedures.

A

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.

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10
Q

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 (C_____) through the performance of risk assessment procedures.

A

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.

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11
Q

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 per_________ of risk assessment procedures.

A

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.

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12
Q

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 r___ assessment procedures.

A

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.

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13
Q

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 ass_________ procedures.

A

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.

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14
Q

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 proc______s.

A

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.

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15
Q

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 – Doc_______ the understanding of Internal Control.

A

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.

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16
Q

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 2 – Document the und________ing of Internal Control.

A

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 2 – Document the understanding of Internal Control.

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17
Q

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 2 – Document the understanding of In______ Control.

A

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 2 – Document the understanding of Internal Control.

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18
Q

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 2 – Document the understanding of Internal C______.

A

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 2 – Document the understanding of Internal Control.

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19
Q

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 2 – Document the understanding of Internal Control.

Step 3 – Assess R___ of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
A

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 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
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20
Q

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 3 – Ass___ Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
A

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
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21
Q

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 3 – Assess Risk of Material Misstatement (RMM) which consists of in______ risk (IR) and control risk (CR).

           RMM = IR × CR
A

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
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22
Q

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and co_____ risk (CR).

           RMM = IR × CR
A

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
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23
Q

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           R\_\_\_ = IR × CR
A

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
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24
Q

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = \_\_ × CR
A

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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR).

           RMM = IR × CR
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25
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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR). RMM = IR × __
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 3 – Assess Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR). RMM = IR × CR
26
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of co_____ (TofC) to determine if CR is below maximum,
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum,
27
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 4 – Develop an audit strategy to either: o (RELY?) Per____ tests of control (TofC) to determine if CR is below maximum,
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum,
28
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is be___ maximum,
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum,
29
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below max_____,
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum,
30
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum, reducing R__ below the level of IR
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 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
31
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if C_ is below maximum,
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 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
32
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum, re___ing RMM below the level of IR
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 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
33
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 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 I_
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 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
34
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 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 mo_______ion of the nature, timing, and extent of further audit procedures (sub tests):
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 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):
35
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 4 – Develop an audit strategy to either: o (RE__ ?) 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):
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 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):
36
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 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 al___ing for the modification of the nature, timing, and extent of further audit procedures (sub tests):
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 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):
37
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 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 na____, timing, and extent of further audit procedures (sub tests):
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 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):
38
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 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.
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 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.
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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 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 ext___ of further audit procedures (sub tests):
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 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):
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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 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 fur____ audit procedures (sub tests):
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 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):
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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 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 t___s):
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 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):
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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 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 pro_______es (sub tests):
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 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):
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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 4 – Dev____ 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):
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 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):
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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 4 – Develop an audit strategy to either: or o (NOT R___)
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 4 – Develop an audit strategy to either: or o (NOT Rely)
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to per____ tests of controls,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform t___s of controls,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of co______s,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing C_ at the maximum level as if the control did not exist,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, ass___ing CR at the maximum level as if the control did not exist,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the max____ level as if the control did not exist,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not ex___,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist,
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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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did n__ exist,
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 4 – Develop an audit strategy to either: or o (NOT Rely) Decide NOT to perform tests of controls, assessing CR at the maximum level as if the control did not exist,
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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 4 – Develop an audit strategy to either: 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 R__ as being equal to IR.
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 4 – Develop an audit strategy to either: 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.
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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 4 – Develop an audit strategy to either: 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 I_.
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 4 – Develop an audit strategy to either: 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.
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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 4 – Develop an audit strategy to either: 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 me____ing RMM as being equal to IR.
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 4 – Develop an audit strategy to either: 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.
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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 4 – Develop an audit strategy to either: 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 eq___ to IR.
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 4 – Develop an audit strategy to either: 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.
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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 4 – Develop an au___ 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.
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 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.
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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 4 – Develop an audit str____y 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.
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 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.
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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 4 – Develop an audit strategy to either: o (R___ ?) 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 R___) 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.
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 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.
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) An auditor per____s 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.
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.
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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 – Do______ the understanding of Internal Control. Step 3 – As__ss Risk of Material Misstatement (RMM) which consists of inherent risk (IR) and control risk (CR). RMM = IR × CR). Step 4 – Dev____ 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.
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.
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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 5 – Reas___s Risk of Material Misstatement and evaluate results.
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 5 – Reassess Risk of Material Misstatement and evaluate results.
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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 5 – Reassess R___ of Material Misstatement and evaluate results.
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 5 – Reassess Risk of Material Misstatement and evaluate results.
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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 5 – Reassess Risk of Material Misstatement and eva_____ results.
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 5 – Reassess Risk of Material Misstatement and evaluate results.
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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 5 – Reassess Risk of Material Misstatement and evaluate res___s.
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 5 – Reassess Risk of Material Misstatement and evaluate results.
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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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which t___s of controls were performed,
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed,
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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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were per____ed, evaluate results to reassess RMM
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, evaluate results to reassess RMM
68
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, eva_____ results to reassess RMM
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, evaluate results to reassess RMM
69
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, evaluate results to rea___ss RMM
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, evaluate results to reassess RMM
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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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, evaluate results to reassess R__
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 5 – Reassess Risk of Material Misstatement and evaluate results. o For controls for which tests of controls were performed, evaluate results to reassess RMM
71
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 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 dete_____ if it is appropriate
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 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
72
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 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 app________ to modify the nature, timing, and extent of 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 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.
73
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 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 mo___y the nature, timing, and extent of 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 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.
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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 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 au___ 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 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.
75
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 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 fur____ 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 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.
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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 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 pro______s.
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 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.
77
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 6 – Do_______ conclusions and determine the effect on the planned substantive 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 6 – Document conclusions and determine the effect on the planned substantive procedures.
78
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 6 – Document conc_______s and determine the effect on the planned substantive 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 6 – Document conclusions and determine the effect on the planned substantive procedures.
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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 6 – Document conclusions and det_______ the effect on the planned substantive 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 6 – Document conclusions and determine the effect on the planned substantive procedures.
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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 6 – Document conclusions and determine the ef____ on the planned substantive 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 6 – Document conclusions and determine the effect on the planned substantive procedures.
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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 6 – Document conclusions and determine the effect on the pl___ed substantive 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 6 – Document conclusions and determine the effect on the planned substantive procedures.
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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 6 – Document conclusions and determine the effect on the planned subst_____ 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 6 – Document conclusions and determine the effect on the planned substantive procedures.
83
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 6 – Document conclusions and determine the effect on the planned substantive pr_______es.
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 6 – Document conclusions and determine the effect on the planned substantive procedures.
84
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 6 – Document conclusions and determine the effect on the planned substantive procedures. At this point, the au___ 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 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.
85
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 6 – Document conclusions and determine the effect on the planned substantive procedures. At this point, the audit program needs to be dev____ed 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 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.
86
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 6 – Document conclusions and determine the effect on the planned substantive procedures. At this point, the audit program needs to be developed or re____ed 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 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.
87
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 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 fur____ 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 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.
88
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 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 pro_____es.
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 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.
89
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 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 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.
90
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.
91
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum, CR < 100% or CR < 1.0 RMM = IR x CR reducing RMM below the level of IR RMM < 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, CR = 100% or CR = 1.0 RMM = IR x CR RMM = IR x 1.0 RMM = IR and measuring RMM as being equal to IR.
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 4 – Develop an audit strategy to either: o (RELY?) Perform tests of control (TofC) to determine if CR is below maximum, CR < 100% or CR < 1.0 RMM = IR x CR reducing RMM below the level of IR RMM < 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, CR = 100% or CR = 1.0 RMM = IR x CR RMM = IR x 1.0 RMM = IR and measuring RMM as being equal to IR.
92
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the De____ of CRIME by performing Risk Assessment Procedures (what is the form?) Have the controls been IMPLEMENTED (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
93
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CR___ by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
94
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by per___ing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
95
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Asse_______ Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
96
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Pro______es (What is the form?) Have the controls been IMPLEMENTED (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
97
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the f___?) Have the controls been IMPLEMENTED (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
98
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been ____________ (put into use?).
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?).
99
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the imp_________ of a control means to determine whether a control is actually being used by the entity.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
100
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a co_____ means to determine whether a control is actually being used by the entity.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
101
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to det_______ whether a control is actually being used by the entity.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
102
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a co_____ is actually being used by the entity.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
103
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is ac_____ly being used by the entity.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
104
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being __ed by the entity.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
105
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the e____y.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity.
106
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the de____ of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
107
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is imp_____y designed, it may represent a material weakness in the entity’s internal control.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
108
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a ma______ weakness in the entity’s internal control.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
109
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly de____ed, it may represent a material weakness in the entity’s internal control.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
110
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material wea_____s in the entity’s internal control.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
111
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal co_____.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
112
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Und______d the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?). To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures (What is the form?) Have the controls been IMPLEMENTED (put into use?). To evaluate the implementation of a control means to determine whether a control is actually being used by the entity. The auditor first considers the design of the control. If the control is improperly designed, it may represent a material weakness in the entity’s internal control.
113
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an un_______ing of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
114
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the en___y and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
115
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its env________t, including its internal control (CRIME) through the performance of risk assessment procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
116
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (C_____) through the performance of risk assessment procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
117
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the perf_______ of risk assessment procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
118
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of r___ assessment procedures.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
119
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment pro_____es.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures.
120
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are pro______es designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
121
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an ade______ understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
122
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate under_____ing to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
123
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the r___ of material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
124
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to ef____ly assess the risk of material misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
125
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of m_______ misstatement of the financial statements.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures An auditor obtains an understanding of the entity and its environment, including its internal control (CRIME) through the performance of risk assessment procedures. These are procedures designed to provide the auditor with an adequate understanding to enable the auditor to effectively assess the risk of material misstatement of the financial statements.
126
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk asse______t procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
127
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Ana______ procedures (Using high level data)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high level data)
128
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical pro______es (Using high level data)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high level data)
129
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using h___ level data)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high level data)
130
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high le___ data)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high level data)
131
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high level d___)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Analytical procedures (Using high level data)
132
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of m_________ and others within the entity, including inquiries of internal auditors.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
133
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the en___y, including inquiries of internal auditors.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
134
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • In____ies of management and others within the entity, including inquiries of internal auditors.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and o____s within the entity, including inquiries of internal auditors.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others with__ the entity, including inquiries of internal auditors.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of int_____ auditors.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal au____s.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inquiries of management and others within the entity, including inquiries of internal auditors.
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Insp_____ (of documents and records)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inspection (of documents and records)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inspection (of doc______s and records)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inspection (of documents and records)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inspection (of documents and re____s)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Inspection (of documents and records)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Obse______ (the application of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the application of spe_____controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the application of specific co_____s)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the application of specific controls)
145
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the app_______ of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: • Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures R___ assessment procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Analytical pro_______s (Using high level data) * Inquiries of m________t and others within the entity, including inquiries of internal auditors. * Inspection (of doc_____s and records) * Observation (the ap________ of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Ana______ procedures (Using high level data) * In_____ies of management and others within the entity, including inquiries of internal auditors. * Insp_____ (of documents and records) * Obs_______ (the application of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment pro_______s include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures Risk assessment procedures include: * Analytical procedures (Using high level data) * Inquiries of management and others within the entity, including inquiries of internal auditors. * Inspection (of documents and records) * Observation (the application of specific controls)
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Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures Most of the information that an auditor obtains about an entity’s internal controls will initially be the result of inquiries made of the entity’s management and others who the auditor believes can provide relevant information.
Obtain an Understanding of the Entity’s Internal Control Structure (AU-C 315) Step 1 – 1. Understand the Design of CRIME by performing Risk Assessment Procedures Most of the information that an auditor obtains about an entity’s internal controls will initially be the result of inquiries made of the entity’s management and others who the auditor believes can provide relevant information.

CPA AUD Flashcards (62 decks)

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