Chapter 6 covers the role of internal control in a

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Unformatted text preview: m (discussed next). This assessment of internal control will be in greater depth if the client is a public company, because for public companies the auditor is required to report on both the company’s internal control over financial reporting and the company’s financial statements. The outcome of the auditor’s planning process is a written audit plan that sets forth the nature, extent, and timing of the audit work. Chapters 3, 4, and 5 cover the issues that are involved in this phase of the audit. Consider and Audit Internal Control Internal control is designed and effected by an entity’s board of directors, management, and other personnel to provide reasonable assurance regarding the achievement of objectives in the following categories: (1) reliability of financial reporting, (2) effectiveness and efficiency of operations, and (3) compliance with applicable laws and regulations. When obtaining an understanding of the entity and its environment, the auditor obtains an understanding of internal control to help the auditor assess risk and identify areas where financial statements might be...
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