Overview
This program explores the role of client internal controls for balancing efficiency and effectiveness in a risk-based audit. We offer practical insights regarding an auditor's assessment of the risk of material misstatement when auditing financial statements of non-issuers, with particular emphasis on internal controls of small-to-medium clients.
Objectives
- Identify minimum understanding and documentation requirements if the auditor does not intend to rely on internal controls
- Recognize internal controls of less-sophisticated, small-to-medium sized audit clients
- Utilize identified internal controls for an efficient, risk-based approach to audits conducted in accordance with generally accepted auditing standards
- Document your procedures and related conclusions
Highlights
- Specific matters auditors should consider when obtaining and documenting an understanding of the client's internal control system
- Development of a tailored audit approach that considers the potential reliance on internal controls
- Guidance for establishing an adequate basis for reliance on internal controls of less formal, smaller clients
