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CMA Intermediate · Corporate Accounting and Auditing · Audit Risk, Internal Control, Internal Check and Internal Audit

For the purposes of the Standards on Auditing, SA 315 divides an entity's internal control into five components. Which one of the following is NOT one of those five components?

Substantive analytical procedures are not a component of internal control. SA 315 names five components: control environment, the entity's risk assessment process, information system and communication, control activities, and monitoring of controls. Substantive analytical procedures are procedures performed by the auditor to obtain evidence.

  1. AThe control environment
  2. BThe entity's risk assessment process
  3. CMonitoring of controls
  4. DSubstantive analytical proceduresCorrect

Explanation

SA 315 lists the five components as the control environment, the entity's risk assessment process, the information system (including related business processes relevant to financial reporting, and communication), control activities, and monitoring of controls. Substantive analytical procedures are an audit procedure performed by the auditor, not a component of the entity's internal control.

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