As an audit manager at Gung & Ho, CPAs, you have beenscheduled to serve as the discussion leader for an in-officetraining session on consideration of the internal control structurein a financial statement audit. Gung & Ho's audit practiceconsists of audits of privately owned companies and not-for-profitorganizations.
Required Prepare an outline of comments you plan to make toindicate similarities and differences in how each of the followingitems is handled under a primarily substantive approach versus areliance on controls approach.
a. Understand entity-level controls.
b. Understand the flow of transactions.
c. Identify what can go wrong (WCGW) for financial statementassertions.
d. Identify relevant controls to test.
e. Determine preliminary audit strategy.
f. Perform tests of controls.
g. Evaluate audit evidence, assess control risk, and reevaluateaudit strategy (if necessary).
h. Report internal control weaknesses to those charged withgovernance.
