Describe the steps in Figure 9.7. FIGURE 9.7 Flowchart of the Lower Control Risk Approach Obtain an

Describe the steps in Figure 9.7.

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FIGURE 9.7 Flowchart of the Lower Control Risk Approach Obtain an understanding of relevant internal control policies and procedures-document this understanding. Perform tests of controls necessary to support a lower planned level of control risk. Assess control risk (usually at a moderate or Tow level if the preceding procedures support it). No Is it likely that additional evidence can be obtained to support a further reduction in the assessed level of control risk and is it efficient to do so? Yes Perform additional tests of controls-reassess the level of control risk and decide whether that level of control risk supports the planned level of substantive tests. Yes-good If the level of control risk supports the planned level of substantive tests, or No Poor Result If the level of control risk does not support the planned level of substantive tests, No revise the planned level of substantive tests, document the assessment of control risk and the basis for that assessment. and document the revised assessment of control risk and the basis for that assessment, and design the planned nature, timing, and extent of substantive tests. design the revised nature, timing, and extent of substantive tests.