MGAD10H3 Chapter Notes - Chapter 8: Sample Size Determination, Audit Risk, Internal Control
Document Summary
Chapter 8 execution of the audit testing of controls. Cas 260 communication with those charged with governance. Cas 265 communicating deficiencies in internal control to those charged with governance and management. Cas 315 identifying and assessing the risks of material misstatement through understanding the entity and its environment. Controls have two main objectives: to prevent or detect misstatements or to support the automated parts of the business in the functioning of the controls in place. Controls may not provide evidence of control (i. e. signatures do not guarantee review) Detective controls should: completely and accurately capture all relevant data, identify all potentially significant errors, performed consistently and regularly, and include timely follow-up (i. e. management reviews, performance indicators, reconciliations, reports showing transactions) Preventive controls are programming driven, whereas detective controls are physical evidence driven. Detective controls do rely heavily on preventive controls. Manual controls (i. e. locked safe for cash)
