Internal Control Communications and Reports Flashcards
In the communication of significant internal control related matters for nonissuer, the auditor should communicate such information no later than?
60 days after the report release data.
Under AICPA’s auditing standards, Communication of significant control deficiencies should include the following:
(1) state that the purpose of the audit was to report on the financial statements, not to provide assurance on internal control;
(2) give the definition of significant control deficiencies and material weaknesses
(3) state that the report is intended solely for the information and use of those charged with governance, management, and others within the organization (or specified regulatory agency) and is not intended to be, and should not be, used by anyone other than the specified parties.
Control deficiency may arise in either the design or operation of a control. This is considered the lowest level of deficiency identified in the standards. Also?
a design deficiency occurs when the control is missing or it does not operate as designed.
an operating deficiency of a control happens when the control does not function as intended, or the person performing the control does not know how to use it or the authority to use it.
The audit committee is a subgroup of the board of directors responsible for?
Assisting the board of directors in fulfilling its oversight responsibilities. their section includes oversight of financial reporting.
The AICPA standards provide guidance for nonissuer or nonpublic entities, therefore
Audit conducted with AICPA standards does not apply to public companies or issuers.
When an auditor in engaged to report on an integrated audit, that is a review of the effectiveness of internal controls and fair presentation of the financial statements, he/she issue an adverse opinion if ?
A material weakness exist.
When providing a written assessment about the effectiveness of internal control the auditor’s report must be accompanied by a separate report from management stating management’s responsibility for?
assessing about the effectiveness of internal control including that it is a condition required to accept the engagement.
When there is a scope limitation, the auditor will express a?
Qualified opinion or disclaimer of opinion on internal control
When there are material weaknesses which are significant control deficiencies that will cause material misstatement on the financial statements, the auditor is required to express an?
Adverse opinion on the effectiveness of internal control
Only Significant deficiencies and Material weaknesses are required to be communicated to?
management and those charge with governance.
What it means to disclaim an opinion?
It means that the person is unable to form an opinion due to insufficient or unreliable information.
Reports that results from the by product of an audit, which means information that was discovered during the audit but the auditor was not looking for it, its reported to the party in charge such as internal audit commitee , management and those charged with governance and must be restricted to the specify party.
this is the reason for the restriction of the use of the report in an audit of nonissuer.
