The Committee of Sponsoring Organizations' COSO Report: Internal Control: Integrated Framework defines internal control as a process, effected by an entity's board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and compliance with applicable laws and regulations.

Required:

1. What is the purpose of the auditor's consideration of an entity's internal controls?

2. What are the objectives of a preliminary evaluation of internal control?

3. How is the auditor's understanding of internal control documented? Discuss the advantages of each type of documentation.

4. What is the purpose of tests of controls?

5. If an auditor is satisfied after considering internal control that no significant deficiencies exist, is it necessary to perform substantive tests of details?