1. At many companies, management identifies and tests what it describes as ‘key’ or ‘significant’ controls as a part of its assessment of internal control over financial reporting. Is the auditor...

1. At many companies, management identifies and tests what it describes as ‘key’ or ‘significant’ controls as a part of its assessment of internal control over financial reporting. Is the auditor required to test all the controls that management tested because management described them as key or significant? (Adapted from PCAOB, 2005)

2. How does the auditor’s assessment of risk affect the auditor’s decisions about the nature, timing and extent of testing of controls? (Adapted from PCAOB, 2005)