ACCT 107 Lecture Notes - Lecture 12: Audit Risk, Audit Evidence, Internal Control
6 Oct 2020
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Audit risk for segments: both control risk and inherent risk are typically set for each cycle, each account, and often even each audit objective, not for the overall audit. Measurement limitations: one major limitation in the audit risk model is the difficulty of measuring the components of the model. Tests of details of balances evidence planning worksheet: auditors develop various types of worksheets to aid in relating the considerations affecting audit evidence to the appropriate evidence to accumulate. Management must establish and maintain the entity"s internal controls. Management" design and implementation of internal control is based on two key underlying concepts. Management of all public companies to issue an internal control report that includes the following. An acknowledgement of responsibility for internal controls. Must assess control risk in every audit. Assess the likelihood of the risk occurring. Determine actions necessary to manage the risk. Board of directors or audit committee participation.
