The preliminary results of assessing whether a principle is present and functioning supports the assessment at the component level.

Management exercises judgment when determining whether principles are present and functioning, including the possibility of having a principle present and functioning despite internal control deficiencies.

Internal control deficiencies are evaluated for severity at both the principle and component levels.

Points of focus may be added or customized to fit the unique facts and circumstances of the entity.

If a major deficiency is detected in a principle, then the principle and its associated component are not present and functioning and the system of internal control is not effective.