ACG 5637 Chapter Notes - Chapter 7: Control Risks, Internal Control, Audit Risk
21 Oct 2020
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Control risk and tests of financial statement assertions: To achieve a given level of audit risk, auditors need to choose the extent to rely on and test a client"s controls versus substantive tests of assertions. The auditor"s control reporting responsibilities in a gaas audit: Some matter related to internal control should be communicated to the audit committee (or. The first step to determine what to report depends on which controls are most important to the system. Next, the auditor should assess whether any of the important controls are deficient (missing or not operating properly) such that the management or bod would consider that they merit attention. The auditor should then communicate to the client the nature of significant deficiencies. Determining if a deficiency is significant is a matter of judgment and not only based on if an actual material misstatement has occurred. It is based on the possibility of an error occurring in the future.
