Understanding of internal control


Assume that you have assessed inherent risk at a very high level. While obtaining an understanding of internal control, you have determined that it appearts to be very strong. Nonetheless, due to the large number of transactions involved you have chosen NOT to test controls in the area.

a. At what level will the planned assessed level of control risk be established.

b. At what level will detection risk be established.

c. At what level will the final assessed level of control risk be established.

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Accounting Basics: Understanding of internal control
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