Shelley Romano is explaining the procedures used to document control risk to a new staff assistant. There is considerable discussion about the nature of documentation required for various levels of control risk assessment, especially when the auditor chooses to assess control risk at a maximum

(no reliance on the controls).

Required:

a. What is the auditor required to document when control risk is assessed as high for an assertion?

b. Explain the documentation requirements when the level of control risk is assessed as low for an assertion. ;

c. Must the auditor’s documentation state the assessed level of control risk for each financial assertion in the client’s financial statements, or is it acceptable to establish one overall control risk assessment for the client? Explain.