| A51. | The division of internal control into the following five components, for purposes of the ISAs (UK and Ireland), provides a useful framework for auditors to consider how different aspects of an entity's internal control may affect the audit: |
| (a) | The control environment; |
| (b) | The entity's risk assessment process; |
| (c) | The information system, including the related business processes, relevant to financial reporting, and communication; |
| (d) | Control activities; and |
| (e) | Monitoring of controls. |
| The division does not necessarily reflect how an entity designs, implements and maintains internal control, or how it may classify any particular component. Auditors may use different terminology or frameworks to describe the various aspects of internal control, and their effect on the audit than those used in this ISA (UK and Ireland), provided all the components described in this ISA (UK and Ireland) are addressed. |
| A52. | Application material relating to the five components of internal control as they relate to a financial statement audit is set out in paragraphs A69-A104 below. Appendix 1 provides further explanation of these components of internal control. |
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