1. If an auditor does not intend to rely on internal controls in the audit, does the auditor need to obtain an understanding of internal control? Explain.
2. Identify four risks associated with IT systems in accounting. For each of the four risks, identify whether they are mitigated by IT general controls or IT application controls. Identify a specific control that mitigates the risk (for each of the four IT risks identified) and explain how it mitigates the risk identified.
3. Four approaches to internal control documentation are discussed in this chapter. List the advantages and disadvantages of each. How would documentation assist the auditor to identify strengths and weaknesses of an entity's system of internal controls?
4. If an auditor identifies an internal control weakness for an assertion, how does it affect the audit strategy? If the auditor identifies an internal control strength for an assertion, how does it affect the audit strategy?
5. Why do auditors prepare management letters?
6. Sinha Airways owns many of its aircraft. The useful lives and residual values may be influenced by external changes to economic conditions, demand, and new technology. Analytical procedures show that depreciation expense is down by 8% compared to prior years.

a. Discuss what can go wrong.

b. Suggest an internal control that management might put in place to control the appropriate recording of depreciation expense.