State the four-step approach to designing tests of controls and substantive tests of transactions. The four-step approach to designing tests of controls and substantive tests of transactions is as follows: (Label the steps in the proper numerical order for the four-step approach [1, 2, 3, and 4]. If an item is not one of the four-steps, leave the input field empty.) Design tests of details for a specific account balance to satisfy balance- related audit objectives. 4 Identify specific control policies and procedures that should reduce control risk for each transaction-related audit objective. 2 3 Understand the clients business and industry. Design appropriate substantive tests of transactions considering deficiencies in internal control and expected results from test of controls for each key control. 1 2 Identify client business risks affecting the account balance. Apply the transaction-related audit objectives to the class of transactions being tested. Perform analytical procedures of the account balances. Develop appropriate tests of controls for each key control. 1 3 3