Risk Assessment Objective (8)

Question 1

What must an auditor understand in the entity’s system of internal control (C)

Answer 1

Control environment

Question 2

What must an auditor understand in the entity’s system of internal control (R)

Answer 2

Entity’s risk assessment process

Question 3

What must an auditor understand in the entity’s system of internal control (I)

Answer 3

Entity’s process to monitor internal control

Question 4

What must an auditor understand in the entity’s system of internal control (S)

Answer 4

The information system and communication

Question 5

What must an auditor understand in the entity’s system of internal control (A)

Answer 5

Control activities

Question 6

What must the auditor understand

Answer 6

The entity’s risk assessment process relevant to preparation of the FS

Question 7

Example of the entity’s risk assessment process relevant to preparation of the FS (business)

Answer 7

Identifying business risks (which are relevant to financial reporting objectives)

Question 8

Example of the entity’s risk assessment process relevant to preparation of the FS (risks)

Answer 8

Assessing the significance of risks and addressing risks

Question 9

What does the auditor evaluate?

Answer 9

Whether the risk assessment process is appropriate for an entity of its nature complexity