Surgent's Testing Internal Control and Reporting Deficiencies

Overview

The risk assessment process requires the auditor to understand internal controls over financial reporting and report deficiencies to management and those charged with governance as defined by professional standards. Auditors may be also required or decide to test internal controls for effectiveness. This module builds on the previous module on internal control extending the participant’s skills to effective and efficient testing of internal controls and communicating deficiencies. (Please Note: This module is part of Surgent’s Audit Skills Training: Level 3.)

Highlights

Refresher on understanding internal controls
When testing internal controls is required
When testing of internal controls is an effective strategy to reduce substantive testing
Designing tests of controls
Responses when deviations are discovered in the design or operating effectiveness of internal control

Prerequisites

Familiarity with auditing and accounting and reporting standards

Designed For

Accountants who have responsibility for evaluating the design and operating effectiveness of controls in a financial statement audit

Objectives

Explain the professional standards related to and rationale for understanding and testing internal controls
Discuss the professional standards related to testing controls for operating effectiveness
Illustrate the appropriate level of linkage between the work performed in testing internal controls, control reliance and reporting on internal controls
Identify impact of a control reliance strategy on the detailed audit plan