Upgrade to remove ads
19-Communication of IC matters identified during audit
Terms in this set (14)
Basic responsibility for communication of IC matters?
Must communicate material weaknesses and significant deficiencies in either design or operation of IC. May choose to report lesser deficiencies
Deficiency or combination of deficiencies in IC such that there is a reasonable possibility that a material misstatement will not be prevented or detected and corrected in a timely basis
Deficiency or combination of deficiencies in IC that is less severe than a material weakness but is large enough to merit attention by those charged with governance
When the design or operation of the control doesn't allow management/employees in the normal course of business to prevent or detect misstatements on a timely basis.
Deficiency in design
When the control necessary to meet a control objective is missing, or when the objective is not always met even when control is operating as designed.
Deficiency in operation
When a properly designed control does not operate as designed, or when the person performing the control does not have the authority or competence to effectively perform the control.
Consideration of deficiencies?
Both likelihood and potential magnitude in determining whether they are significant deficiencies or material weaknesses
Deficiency risk factors (5)
a. The nature of the accounts, classes of transactions, disclosures, and assertions involved;
b. The susceptibility of the related asset or liability to loss or fraud;
c. The subjectivity, complexity, or extent of judgment involved;
d. The interaction or relationship of the control with other controls;
e. The interaction among the deficiencies; and
f. The possible future consequences of the deficiency.
Form of communication for SD and MW?
Both should be communicated in writing to management and those charged with governance, including matters communicated verbally earlier in the audit.
Communication of lesser IC weaknesses?
Can be in writing or verbal, but should document
Timing of communication
No later than 60 days following report release date; sooner is preferred;
Content of communication?
1. Purpose is to express opinion of f/s, not IC
2. No opinion of effectiveness of IC
3. Consideration of IC not designed to detect all SD and MW
4. Define SD and MW as applicable
5. Identify matters of SD or MW as applicable
6. Communication intended solely for use by organization
Deficiencies identified in the report?
Only material weaknesses should be identified if required for govt users;
Report on IC should be restricted for use by the organization
This set is often in folders with...
16- Internal Control Basics
17-IC Consideration and approach
18-Internal Control Standards
20-Using internal audit
You might also like...
A4_M10_Communication With Management and Those Cha…
Auditing Chapter 9
6 step audit process
Other sets by this creator
REG 45-Federal Estate Tax
REG 46-Fiduciary taxation
REG 44.3-S Corp Distributions and special taxes
Other Quizlet sets
Bio chapter 19-21
UCDH Head & Neck Anatomy Ch. 32
Community & Mental Health Nrsng
Psychology Chapter 13 and 14 vocab