Is There a Relationship Between Internal Control Objectives and Components?
There is a direct relationship between objectives and components. This results from the fact that objectives are what an entity strives to achieve, while components are what an entity needs to achieve the objectives. It is also important to remember that internal control is relevant not only to the entire entity, but also to an entity’s operating units and business functions. Question: What Objectives and Controls are Relevant to a Financial Statement Audit? Answer: In general, the auditor should consider the controls that pertain to the entity’s objective of preparing financial statements for external use that are presented fairly in conformity with generally accepted accounting principles (GAAP) or some other comprehensive basis of accounting other than GAAP (OCBOA). The controls relating to operations and compliance objectives may be relevant to a financial statement audit if they pertain to data the auditor evaluates or uses. For example, the auditor may consider the controls relev
