ISA 400 Risk Assessments and Internal Control deals with internal control objectives and audit procedures. A proper understanding of internal controls is essential to auditors in order that they understand the business and are able to effectively plan and execute tests of controls and an appropriate level of substantive procedures. Required:

(i) Explain the auditors objective in reviewing the internal control structure. (5 marks)

(ii) Explain why an auditor, after completing his or her evaluation of internal control, is satisfied that no material weaknesses in the clients internal control structure exist and that there is a low level of control risk, still need to test transactions. (4 marks)