RSM323H1- Midterm Exam Guide - Comprehensive Notes for the exam ( 42 pages long!)
Document Summary
Test control (optional) (if not assess and test control => control risk will be 100% since auditors have no evidence whether control risk is reliable) => any risk under 100% need to be supported by evidence. 6. controls => the impact of the missing controls (fundamental) Therefore, it depends on the quality of the control system whether or not to test the control (this is done by understanding and assessing the control system) Cr is never lower than 20%, cr >= cr designed. Ar = ir * cr * dr. Test control (optional) (if not assess and test control => control risk will be 100% since auditors have no evidence whether control risk is reliable) => any risk under 100% needs to be supported by evidence. How to assess the understanding of internal control: Control environment: needs documents to describe what you see. Information and business system, monitoring control, etc. (flow of transaction)
