Auditors are required to obtain a sufficient under standing of each
Auditors are required to obtain a sufficient under-standing of each component of a client’s internal control. This understanding is used to assess control risk and plan the audit of the client’s financial statements.

a. For what purposes should an auditors’ understanding of the internal control components be used in planning an audit?
b. What is required for an audit team to assess control risk below the maximum level?
c. What should an audit team consider when seeking to reduce the planned assessed level of control risk below the maximum?
d. What are the documentation requirements concerning a client’s internal control components and the assessed level of control risk?

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