 In this presentation, we will take a look at the assessment of control risk related to revenue process. We've discussed the components of the revenue process. We discussed the consideration of the inherent... First, a word from our sponsor. Well, actually, these are just items that we picked from the YouTube shopping affiliate program, but that's actually good for you because these aren't things that were just given to us from some large corporation, which we don't even use in exchange for us selling them to you. These are things that we actually researched, purchased, and used ourselves. Focusrite Scarlett Solo Third Gen USB interface with software suite. I've been using a Focusrite for years for my audio needs before which time I had a USB microphone which plugged directly into the computer, but I think you'll find as I have found if you want to increase the quality of your microphone, you will need an interface and the Focusrite is the go-to interface as far as I'm concerned. I've been using this for years now. It works well. It's easy to use. It seems quite durably built because I only do the screen recordings. I only need the one Solo interface. However, if you have multiple microphones you need to plug in or if you have other instruments you need to plug in, you can look at a similar model that has more input ports. If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com where we have many different courses. You can purchase one at a time or have a subscription model given you access to all the courses. Courses which are well organized have other resources like Excel files and PDF files to download and no commercials. Risk and remember the inherent risks are those types of risk factors within the revenue process that if we did not have any controls the inherent riskiness of the revenue process. Now we are considering the control risks which are those controls that we would put in place after typically considering what the inherent risks are the control risks then mitigating to some degree some of the inherent risks within the revenue process depending on the type of organization or industry we are in. As the auditor of course we want to consider what the control risks are related to the revenue process so that we can have an understanding of those controls assess them as high or low and have an understanding of how much substantive testing we need to do then with relation to the revenue recognition process. So control risk assessment revenue we want to understand the revenue process based on a reliance strategy and document it. So we're going to test the internal controls with relation to the revenue process then of course document that that's going to be part of our audit evidence plan and perform test of controls on revenue transactions. So we're going to have to testing of controls on the revenue transactions and set the control risk for the revenue process and document it. So then we're going to basically say after the test of controls with relation to the revenue process we want to set what the control risk will be and remember the control risk relates to the ability for the controls to detect a material misstatement. So we want to be able to set the control risk consider the inherent risk and then think about how much substantive testing that we will need to do. So we'll need to get an understanding of the control environment the control environment an understanding of the control environment is usually done on an overall entity basis. In other words we're kind of considering within the control environment the overall attitude towards internal controls within the entity that's usually done from a top down perspective. What's the attitude at the top with relation to the control environment that usually flows down or flows through the entire organizations entities risk assessment process understand how management thinks about risks that are relevant to the revenue process. Auditors should estimate the significance of the risk and assess the likelihood of its occurrence. Then we consider the control activities either these are the actual activities that are going to be set in place within the control system related to revenue. It's the auditor identifies the controls to ensure the insurance for transactions and events are being met documentation of the auditor's understanding of the revenue process may be accomplished by using. So we're going to document this information with possibly procedural manuals working with the procedures within this process of the revenue recognition and remember the controls are the control activities are the actual controls that are going to be in place. So now we're thinking about how can we document our understanding of the actual controls that are in place. We could use procedures manuals to get an idea of what the controls are in place and document those controls a narrative description of what the controls are. We might put it in a narrative form. We might have a flowchart that will give us the major components within a flowchart type format of the system as it goes through the revenue recognition process and we might have an internal control questionnaire that could be set up as part of our documentation with relation to the control activities as well.