Explain and apply audit processes and tests to critically evaluate internal control systems and identify and communicate weaknesses and deficiencies
Explain why an auditor needs to obtain an understanding of internal
control relevant to the audit.
Explain how auditors identify significant deficiencies in internal
control systems and how those significant deficiencies limit the extent of auditor’s reliance on that system.
Auditor shall: (Guidance)
• Assess the adequacy of the accounting system as a basis for preparing the accounts
• Identify the types of potential misstatements that could occur in the accounts
• Consider factors that affect the risk of misstatements
• Design appropriate audit procedures
• Recording the internal control system
Explain the need to modify the audit strategy and audit plan following the results of tests of control.
Discuss and provide examples of how the reporting of internal control significant deficiencies and recommendations to overcome those significant deficiencies are provided to management.Guidance
• ISA 265
• ISA 260 – Communication of audit matters with those charged with governance
• Management letter
• Communication with audit committee (listed companies)
• Question 1 15 Marks
• Question 2 40 Marks
• Question3 15 Marks
• Question 4 20 Marks
• Conclusion 5 Marks
• References and structure 5 Marks
Please adjust the number of words on each questions as Q2 contains much more marks than others. So you may want to write more on Q4
The word limit is 1500 words and the maximum number of words allowed is 1650 words.