Jaime, the senior auditor on the audit of the Boston Brewery Co., a public company, is responsible for initial planning of the integrated audit. She is responsible for the supervision and review of two staff accountants performing both controls tests and tests of details of balances. After the tests of controls are completed she reviews the work of the staff accountants and concludes that no significant deficiencies or material weaknesses exist in ICFR. Based on this she decides she can rely on the company’s ICFR for the entire reporting period. This was not what she expected when she designed the initial audit plan.
How can Jaime’s conclusion on internal controls affect the nature, timing, and extent of detail testing on the financial statement audit? Would your answer be different if the controls had changed halfway through the year and the audit team had determined that internal controls operated effectively only during the second half of the year?

  • CreatedJanuary 21, 2015
  • Files Included
Post your question