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15 Cards in this Set
- Front
- Back
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A failure to get a management report is a.... |
Scope limitation |
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Management must comply with these four things in order for an auditor to an complete an audit of ICFR... |
1. Accept responsibility 2. Evaluate effectiveness 3. Support their eval 4. Present a written assessment of the effectiveness of ICFR at the year end |
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Control deficiency exists when.... |
The design or operational of the control prevents it from preventing a material misstatement. |
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Material vs significant weakness... |
A significant weakness still merits attention from those responsible, but a material weakness suggests that there's a reasonable possibility of a material misstatement |
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Design deficiency |
1. It's poorly designed 2. Even if it operates correctly, it wouldn't work 3. Or, it's missing |
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Operational deficiency |
The design is fine, but it never works. 1. It does not operate appropriately 2. The person operating does not have the appropriate skills/qualifications |
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An auditor must communicate in writing to management and the audit committee any.... |
significant and material weaknesses. |
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Four steps to planning the audit of ICFR |
1. Which are important? 2. How often do they function? 3. Do I rely on the work of others? 4. Determine materiality |
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Identifying significant accounts (1-4) |
1. Size/composition 2. Susceptibility to misstatement due to errors or fraud 3. Volume of activity due to complexity, homogeneity of the transactions 4. Nature of the account or disclosure |
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Identifying significant accounts (5-7)
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5. Accounting and reporting complexities 6. Exposure to losses in the account 7. Possibility of significant contingent liabilities arising from the activities reflected in the account |
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Identifying significant accounts (8-9) |
8. Existence of related-party transactions 9. Changes from the prior period in account or disclosure characteristics |
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Remediation |
The process of correcting a material weakness in ICFR |
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If a material weakness is corrected before the "as of" date there must be enough time for management and auditors to test the operating effectiveness, otherwise.... |
A adverse opinion is issued. |
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Written representations... |
Failure to obtain these represents a scope limitation. |
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Five other reporting issues |
1. Management's report is incomplete or improperly presented 2. The auditor decides to refer to the report of the other auditor 3. A significant subsequent event has occurred 4. There is other information contained in management's report on internal control 5. There is a re mediated material weakness at year end |
