Internal Auditing

Intel Corporation: Audit Design and Risk Assessment

PHASE I Plan and design an audit approach

Accept client and perform initial planning

• Decide whether to accept a new client or continue serving an existing one

• Intel is the market leader and world’s largest producer of semiconductor chip for the digital economy. The consolidated Financial Statements and Internal Controls ofIntel Corp. are audited by Earnst& Young LLP

• Identify why the client wants or needs an audit

• The client’s reason for wanting/needing an audit will influence the auditor’s acceptable audit risk.

• Intel Corporation wants to provide its investors reasonable assurance that their Financial Statements are free of material misstatements. Since Intel Corporation is a publicly traded company, SEC requires it to be audited by an Independent Accounting Firm for reliable information to help investors with their decisions. Moreover, the audit procedure will help the management to assess the effectiveness of their Internal Control over financial reporting. The audit also assesses the risk of the existence of material weaknesses, tests and evaluates the effectiveness of the design and operationof their internal control based on the assessed risk, and performs other procedures as deemed necessary.

• Obtain an understanding with the client about the terms of engagement in an engagement letter which includes.

• the engagement’s objectives

• the responsibilities of the auditor and management

• the engagement’s limitations

• The engagement objectives: Ernst& Young, Intel’s Chief Audit Executive, and management meet to review Intel’s interim financial results before the publication of Intel’s quarterly earnings press releases.

• According to the report of the Audit Committee, the management’s and Ernst& Young’s presentations to the Audit Committee cover various topics and events that may have significant financial impact and/or are the subject of discussions between...