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Internal Control LO# 1 The auditor uses risk assessment procedures to -obtain an understanding of the entity’s internal control -identify the types of potential misstatements-ascertain factors that affect the risk of material misstatement -design tests of controls and substantive proceduresThe auditor’s understanding of the internal control is a majorfactorindeterminingtheoverallauditstrategyThemajor factor in determining the overall audit strategy. The auditor has a responsibility to: (1)obtain an understanding of internal control and ()g(2)assess control risk. 6-3 InternalControlLO# 2 Internal Control Objectives Reliability of Financial Effectiveness & Efficiency ofOperationsCompliance with Laws & Reportingof OperationsRegulations 6-4

ControlsRelevanttotheAudit LO# 3 Controls Relevant to the AuditObjtiObjectives RlibilitfEffti Cli Reliability of Financial ReportingEffectiveness & Efficiency of OperationsCompliance with Laws & Regulations Generally, internal controls pertaining to the preparation of financial statements for external purposes are pp relevant to an audit. 6-5 ControlsRelevanttotheAudit LO# 3 Controls Relevant to the AuditObjtiObjectives RlibilitfEffti Cli Reliability of Financial ReportingEffectiveness & Efficiency of OperationsCompliance with Laws & Regulations Controls relating to operations and compliance objectives may be relevant when they relate to data the auditor uses to apply auditing procedures. 6-6

The Effect of Information LO# 4 Technology on Internal Control 6-7 ComponentsofInternalControlLO# 5 Components of Internal Control ControlEntity’s Risk AtControl Environment Assessment Process Information System and Related Business Processes Relevant to Financial Reporting & Communication Control ActivitiesMonitoring of Controls 6-8

ComponentsofInternalControl LO# 5 Components of Internal Control6-9 Components of Internal

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