Question: In preparing a report on internal control, the auditor is required to assess the process used by management in developing their report on internal control.
In preparing a report on internal control, the auditor is required to assess the process used by management in developing their report on internal control. Assume that the auditor did not find any material weaknesses in controls.
Required
a. The auditor did find that management's approach to assessing internal controls was deficient in that it (a) was not comprehensive and (b) did not contain sufficient sample sizes for testing controls. Management reports that controls over financial reporting were effective (same finding as the auditor). How does management's approach in its assessment of internal controls affect the auditor's opinion? Explain.
b. To what extent should the auditor and management collaborate in evaluating the design and effectiveness of internal controls over financial reporting? Explain.
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a Under Auditing Standard 2 the auditor had to report on managements assessment process as well as managements conclusion on the audit report Under th... View full answer
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