The auditor considers internal control by four steps.What is the order for these steps?
1) Obtain an understanding of internal control.
2) Assess control risk.
3) Perform tests of controls.
4) Decide on planned detection risk and substantive testing.
A) 4, 1, 2, 3
B) 1, 2, 3, 4
C) 2, 1, 3, 4
D) 1, 3, 2, 4

Question

Quizplus · Accepted Answer

The first step in assessing internal control is to obtain an understanding of it (step 1), followed by assessing control risk (step 2), performing tests of controls (step 3), and finally deciding on planned detection risk and substantive testing (step 4). Therefore, the correct order is 1, 2, 3, 4, which corresponds to choice B.

The Auditor Considers Internal Control by Four Steps