Guide to Using International Standards on Auditing in - IFAC
Guide to Using International Standards on Auditing in - IFAC
Guide to Using International Standards on Auditing in - IFAC
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51<br />
5. Internal C<strong>on</strong>trol — Purpose<br />
and Comp<strong>on</strong>ents<br />
Chapter C<strong>on</strong>tent<br />
To outl<strong>in</strong>e the purpose, scope, and nature of <strong>in</strong>ternal c<strong>on</strong>trol over<br />
f<strong>in</strong>ancial report<strong>in</strong>g, <strong>in</strong>clud<strong>in</strong>g the five comp<strong>on</strong>ents <str<strong>on</strong>g>to</str<strong>on</strong>g> be evaluated by<br />
the audi<str<strong>on</strong>g>to</str<strong>on</strong>g>r.<br />
Relevant ISA<br />
315<br />
Exhibit 5.0-1<br />
Entity Objective = Prepare f<strong>in</strong>ancial statements that are not materially misstated<br />
Identify bus<strong>in</strong>ess/fraud risks that would prevent objective be<strong>in</strong>g achieved<br />
Management’s<br />
Residual Risk<br />
Mangement’s resp<strong>on</strong>se:<br />
<strong>in</strong>ternal c<strong>on</strong>trols that mitigate the risks identified<br />
Low<br />
Risk Exposure <str<strong>on</strong>g>to</str<strong>on</strong>g> Fraud and Error<br />
High
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