Matters of Audit Planning For this section three auditors ha

Matters of Audit Planning For this section, three auditors have completed the planning process and determined the following broad audit plans for their clients. Evaluate each of the auditor\'s plans. Based on the plan, what has the auditor assessed regarding control risk? Your response for each column will be high, medium or low. Broad Audit Plan Has the auditor assessed high, medium or low risk that internal controls will fail to detect misstatements? The auditor plans to test the client\'s internal control system for a variety of attributes related to financial statement assertions. The results of these tests will be augmented by analytical procedures testing. With the exception of the analytical tests, very few substantive tests are planned. a) The auditor plans to perform tests of controls related to financial statement assertions, as well as perform a moderate amount of substantive tests, as of ar interim date. The results of substantive tests will be rolled forward to year-end. Analytical procedures are also included in the plan b) c) The auditor plans to perform a walkthrough of the major transaction cycles as the ONLY testing of internal control. In addition, the auditor plans to gather a substantial amount of external evidence as of the year-end balance sheet date, in addition to performing analytical tests.

Solution

a High control risk because realising a financial statement or declaration without supports or reasons or proofs, it bring the management is great danger in future when supporting are being asked by shareholders or any government authority. b Medium control risk because substantive tests are moderate one and management have corrective period till the end of year c High control risk because the auditor has a few transaction to judge the internal control. The auditor has to undertake substantive tests based on external evidence Side by side the auditor has to perform analytical tests also.