Phase 3

Evaluation of internal control involves an examination of the effectiveness of an organization's system of

internal controls. By engaging in this evaluation, an auditor can determine the extent of other tests that
must be performed in order to arrive at an opinion regarding the fairness of the entity's financial
statements.

Phase 4

Substantive procedures are intended to create evidence that an auditor assembles to support the
assertion that there are no material misstatements in regard to the completeness, validity, and accuracy
of the financial records of an entity. Substantive procedures are performed by an auditor to detect
whether there are any material misstatements in accounting transactions and financial statements are
presented in accordance with financial reporting standards.