ch-11-discussion-topic

As you probably read in the chapter as well as in my ch.11 lecture notes, understanding the control risk assessment flow chart would be crucial not only for studying ch.11 Internal Control Assessment topics, but also would be critical to have a solid conceptual framework for the entire audit process.

In your own words and understanding, list and explain briefly the phases/ steps of a control evaluation of a client’s internal control system- it’s design, placement, and operating effectiveness of their internal control system, and how to incorporate auditors’ control risk assessment result** into audit plan (substantive audit testing plan).

Please begin with the first step: “understanding your client internal control structure” for first time as a new client, and finish as the last step: “developing audit strategy/ audit program (meaning; designing your audit procedures with determining the nature, extent, timing of audit testing plan).

**result from tests of controls performed by auditors (only if they have performed) and result from auditors’ assessed control risk steps.

Remember ?: N-E-T (Nature, Extent, Timing)