12 Questions
What is the auditor required to obtain an understanding of, according to PSA 315 paragraph 24 (Revised 2019)?
The entity's internal control monitoring process
In less complex entities, what is the focus of the auditor's understanding of the entity's process to monitor the system of internal control?
Involvement of management or owner-manager in operations
What may alert the owner-manager to issues with the timing of when customer payments are being recognized in the accounting records in owner-manager entities?
Inaccuracies in monthly statements
For entities with no formal process for monitoring the system of internal control, what does understanding the process include?
Regular financial statement reviews
What aspects of the entity’s process does the auditor need to understand, according to PSA 315 paragraph 24 (Revised 2019)?
Ongoing and separate evaluations for control effectiveness
What is often focused on in less complex entities' process to monitor the system of internal control?
Involvement of management or owner-manager in operations
What should the auditor consider regarding the design of the monitoring activities?
Whether it is periodic or ongoing monitoring
In what way should the results of the monitoring activities be evaluated?
On a timely basis to determine whether the controls have been effective
What might be considered by the auditor regarding the entity's process to monitor the system of internal control in relation to IT?
Controls to monitor complex IT environments that evaluate the continuing design effectiveness of information processing controls and modify them, as appropriate, for changes in conditions
What does ISA 610 (Revised 2013) apply to?
What helps the auditor obtain an understanding of the nature of the internal audit function's responsibilities?
Reviewing the internal audit functions audit plan for the period
What can provide information that is directly relevant to the auditor's identification and assessment of the risks of material misstatement?
The information obtained from the auditor's inquiries
Test your knowledge of PSA 315 (Revised 2019) paragraph 24 and its application in understanding an entity's process for monitoring the internal control system relevant to financial statement preparation.
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