Please describe each of the three broad objectives managementtypically has for internal control. With which of these objectivesis the auditor primarily concerned?

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Deanna HettingerLv2

28 Sep 2019

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56. Describe audit risk and the relationship between the three components.

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harlequinmole499

(Assessing control risk) An auditor is required to obtain asufficient understanding of each
of the components of an entityâs system of internal control to planthe audit of the entityâs
financial statements and to assess control risk for the assertionsembodied in the account
balance, transaction class, and disclosure components of thefinancial statements.

Required
a. Explain the reasons an auditor may assess control risk at themaximum level for one or
more assertions embodied in an account balance.
b. What must an auditor do to support assessing control risk atless than the maximum
level when the auditor has determined that controls have beenplaced in operation?
c. What should an auditor consider when seeking a further reductionin the planned
assessed level of control risk?
d. What are an auditorâs documentation requirements concerning anentityâs system of
internal control and the assessed level of control risk?

Please answer all questions please.

rubymule151

An auditor is required to obtain sufficient understanding of each component of a company's internal control system to plan the audit of a companyâs financial statements, and to assess and evaluate the control risk for assertions that are part of the account balance, transaction class and disclosure components of the financial statements.

Required:

(a) What are managementâs incentives for establishing and maintaining a strong internal control system? Identify and explain the auditorâs main concerns with an internal control system. (4 marks)

(b) Briefly discuss the five components of internal control. (5 marks)

(c) Discuss three tools commonly used by auditors to document their understanding of a companyâs internal control system. Identify and explain the relative strengths and weaknesses of each tool. (6 marks)

peardeer82

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