[DTBird]

When performing risk assessment procedures to obtain an understanding of internal controls, the auditor may include all of the following except:

A.

observing the application of specific controls.

B.

performing analytical procedures.

C.

inspecting documents and reports.

D.

tracing transactions through information system relevant to financial reporting.

^^^^This is a ninja question, the answer is B. However in my Roger book, the Risk Assessment Procedures for internal control include Analytical procedures… Can someone clear this up?

BEC - 77 (5/16)
AUD - TBD (8/16)
REG - 80 (1/16)
FAR - 76 (8/15)

[Spartans92]

From what I recall from Becker, if you are just obtaining an understanding of internal control you do not have to perform analytical procedure. That is only require in the beginning and the end of the audit process. Audit is fading away from my memory now. But the key is “understanding”. You don't need to do that to have an understanding. Some classic examples would be do a quick skim over the documents, observe how things are done etc. Sorry couldn't really offer a better explanation

BEC- PASS

[Zaid3155]

We have control test ( which includes , inquiry, observe, reperformence , inspection the case in answer D) we use these tools to test the control, the analytic procedure and test of details we use them to test the Management assertions, Financial statements accounts.

[Anonymous]

As stated above, the key word in the question is “understanding.” Analytical procedures can be used to test the effectiveness of internal controls, however you must gain an understanding prior to testing that effectiveness.

[Nessie]

I'll agree with the others here….the nuance here is the word “understanding.”
To just understand internal controls initially, you would not perform analytical procedures.

REG Aug 20/15: 88
AUD: Feb 29/16: 80
FAR: Jun 10/16: 80
BEC?

Becker self-study, Becker Final Review & NINJA MCQS

[Author]

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