Question

If an auditor identifies an internal control weakness for an assertion, how does it affect the audit strategy? If the auditor identifies an internal control strength for an assertion, how does it affect the audit strategy?

Answer 1

Answer:

Areas of internal control weakness are the place the auditor regularly plays out extra substantive testing to evaluate the (potential) material misstatement. The connection between weaknesses in internal controls or perceptions that controls being tested didn't work as proposed and the degree of substantive methodology required to address these special cases is uncovered by the auditor, who utilizes this data to rethink the risk of a material misquote. The auditor is likewise prone to perform substantive testing on year end adjusts, with bigger example sizes.

At the point when the auditor distinguishes internal control strengths, the auditor will consider a dependence on controls approach for statements affected by these strengths, perform test of controls to guarantee that controls are solid, and afterward limit meaningful or substantive testing. On the off chance that internal controls are solid the auditor may likewise perform meaningful tests with littler example sizes at a between time date or interim date.