![]() Design tests of controls and substantive procedures.Identify the types of potential misstatements (eg, errors, fraud).Understanding the design of relevant internal control activities is used to: Observation (watching the application of manual controls).Inspection of documents and records, such as authorization forms and procedures manuals. ![]() Inquiries of management and others within the entity, including internal auditors.Analytical procedures (study of data comparisons and relationships) using high-level data.Required risk assessment procedures include AIIO: ![]() These procedures enable the auditor to effectively assess the types of potential misstatements that could occur and the controls that should be in place to mitigate the risk of a material misstatement (RMM). During the planning phase, an auditor obtains an understanding of the entity and its environment through the performance of risk assessment procedures.
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