Obtain Understanding of Internal Control.

The auditor should obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach.

Required

A. The understanding must be good enough to adequately plan the audit in terms of what specific planning matters? Why are these matters important?

B. What factors affect the nature and extent of procedures? Give an example of each.

C. What component of internal control does the auditor typically review first to obtain an understanding? Why start there?
D. List two monitoring activities that the auditor would evaluate.