The five step process in the audit of ICFR includes:
A)form an opinion on the safeguarding of the entity's assets.
B)identify controls to test using a top-down, risk-based approach.
C)form an opinion on the fairness of the presentation of the financial statements.
D)plan the audit of the financial statements.

Question

Quizplus · Accepted Answer

The five step process in the audit of ICFR includes: (1) Understanding the entity and its environment, including its internal control; (2) Identifying controls to test using a top-down, risk-based approach; (3) Testing the design and the operating effectiveness of the selected controls; (4) Evaluating control deficiencies identified during the audit; and (5) Forming an opinion on the effectiveness of the entity's internal control over financial reporting based on the audit evidence obtained. Option A is incorrect as it pertains to the audit of financial statements, not ICFR. Option C is incorrect as it pertains to the opinion on the fairness of financial statement presentation, not the effectiveness of internal control. Option D is incorrect as it is a step in the audit of financial statements and not specifically related to the audit of ICFR.

The Five Step Process in the Audit of ICFR Includes