Obtaining an Understanding of Internal Control

Gain a basic understanding of internal control and how it relates to risk assessment, through the lens of a financial statement auditor but also insightful for entity management and internal auditors.

• Recognize the importance of understanding internal control.
• Recall factors and procedures that an auditor should consider when obtaining an understanding of the entity and its environment, including internal control.
• Recall definitions and key aspects of internal control from various organizations.

• Various definitions and aspects of internal control, including separation of duties and safeguarding of assets
• Key aspects of internal control from various organizations, such as COSO, SEC, and PCAOB
• Factors to consider, for example, industry, regulation, and nature of the entity
• Risk assessment procedures, namely inquiry, analytical procedures, and observation and inspection, as well as brainstorming