Auditing Cases 6th Edition by Mark Beasley,Frank Buckless,Steven Glover,Douglas Prawitt

Exercise 2

Professional auditing standards indicate that an entity's internal controls consist of five interrelated components. (a) What responsibility does an auditor have related to each of these five components (b) One component of internal control is the entity's control environment. What factors should an auditor consider when evaluating the control environment (c) What red flags were present during the 1995 through 1997 audits of CUC that may have suggested weaknesses in CUC's control environment