Discussion: Materiality And Internal Control
In this discussion, explain why inherent risk is set for audit objectives for segments (classes of transactions, balances, and presentation and disclosure) rather than for the overall audit. What is the effect on the amount of evidence the auditor must accumulate when inherent risk changes from medium to high for an audit objective? Provide examples to illustrate your answer. In your response posts, discuss the impact on the audit if internal controls are not evaluated correctly. What factors would an auditor have to consider in the examples provided by peers?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.