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Essay text:
On every audit, you will gain an understanding of internal control that allows you to evaluate its design and determine whether controls are being used at the entity.
Using Your Understanding of the Client, Its Environment, and Its Internal Control
As you gather information, you will begin to form an understanding of the client and how the specific conditions and circumstances pertaining to their business may affect the preparation of the client’s financial statements.
Ultimately, the information you gather and the understanding you gain about the client at this phase of the process provides audit evidence to support your assessment of the risk of material misstatement and, ultimately, your opinion on the financial statements...
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