Peculiarities of the audit assessment of the internal control system of a business entity

Abstract

The article defines the key issues and approaches to assessing the internal control system of a business entity during the audit of financial statements. Particular attention is paid to determining the auditor's understanding and assessment of the elements of the control environment of an entity, the problems of assessing the effectiveness of the internal control system for the implementation of management decisions. The results of the analysis show that the effectiveness of the internal control system depends primarily on the degree of its understanding by the management and owners of the entity, and a correct assessment of the auditor allows him to determine the most appropriate choice of a set of audit procedures when planning and conducting an audit. The correct understanding of the effectiveness of the entity's internal control system, underestimation or overestimation of its condition and confidence in it during the audit has a significant impact on the level of audit risk. The application of certain approaches ensures a sufficient understanding of the internal control system and its assessment by the auditor. CZU: [657.6:005.584.1]:334.72; JEL: M42; DOI: https://doi.org/10.53486/isca2024.34