Describe how the nature of evidence used to evaluate the control environment differs from the nature of evidence used to evaluate control actives.
Describe how the nature of evidence used to evaluate the control environment differs from the nature of evidence used to evaluate control actives.
ANSWER:-
For many control activities, documentation of their performance is more objectively evaluated in contrast to the evaluation of the control environment.
Due to the nature of the subcomponents that constitute the control environment, such as integrity and ethical values and commitment to competence ,the nature of evidence used to evaluate the control environment may differ somewhat from the nature of evidence used to evaluate control activities. While auditors examine similar types of evidence to assess both the control environment and control activities, they often perform more extensive inquires and observation to assess the design and implementation of control environment subcomponents, such as the entity's code of conduct and whistleblowing system, so they can evaluate whether employees understand those policies and procedures and to gain a sense as to the overall ethical tone and perception of management's integrity.
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