Write the word TRUE if the following statement is true, otherwise FALSE.

1 Study of the business and industry and application of analytical procedures during the planning stage of the

audit assist in evaluating inherent risk.

2 When management relies on the external audit as its primary source of monitoring controls, such is considered

as a significant deficiency in an organization's control environment.

3 The auditor faces risk that the audit will not detect material misstatements that occur in the accounting process.

To minimize this risk the auditor relies primarily on internal control.

4 For the most effective internal control, monthly bank statements should be received directly from the banks

and reviewed by the internal auditor.

5 An audit of financial statement is not an assurance engagement.

please explain your answer