a) Explain why an auditor needs to obtain an understanding of the components of internal control relevant to the preparation of the financial statements
b) Describe and explain the five components of a system of internal control
i) control environment
ii) the entity’s risk assessment process,
iii) the entity’s process to monitor the system of internal control
iv) the information system and communication
v) control activities
C2a) Explain how auditors record systems of internal control including the use of narrative notes, flowcharts and questionnaires
b) Evaluate internal control components, including deficiencies and significant deficiencies in internal control.
c) Discuss the limitations of internal control components.