In less complex entities, and in particular owner-manager entities, the auditor’s understanding of the entity’s process to monitor the system of internal control is often focused on how management or the owner-manager is directly involved in operations, …

For entities where there is no formal process for monitoring the system of internal control, understanding the process to monitor the system of internal control may include understanding periodic reviews of management accounting information that are …

Understanding the entity’s process to monitor the system of internal control (Ref: Para. 24(a)) …

Matters that may be relevant for the auditor to consider when understanding how the entity monitors its system of internal control include: The design of the monitoring activities, for example whether it is periodic or ongoing monitoring; The performance …

The auditor may also consider how the entity’s process to monitor the system of internal control addresses monitoring information processing controls that involve the use of IT. This may include, for example: Controls to monitor complex IT environments …

Understanding the entity’s internal audit function (Ref: Para. 24(a)(ii))   Appendix 4 sets out further considerations for understanding the entity’s internal audit function. …

The auditor’s enquiries of appropriate individuals within the internal audit function help the auditor obtain an understanding of the nature of the internal audit function’s responsibilities. If the auditor determines that the function’s responsibilities …

Other sources of information used in the entity’s process to monitor the system of internal control Understanding the sources of information …

Management’s monitoring activities may use information in communications from external parties such as customer complaints or regulator comments that may indicate problems or highlight areas in need of …

Why the auditor is required to understand the sources of information used for the entity’s monitoring of the system of internal control …