create an internal controls audit report

1. Identify anomalies found during substantive and control testing for each audit report.
2. Analyze materiality of control deficiencies and financial misstatements that impact materiality for each audit report.
3. Identify critical matters for each audit report.
4. Formulate an opinion of the audit based on audit results for each audit report.
5. Create audit reports (a financial statement report and an internal controls report) based on Generally Accepted Auditing Standards. Include the following:
   1. Type of audit report to be communicated to client
   2. Title
   3. Client information
   4. Introductory paragraph
   5. Auditors opinion
   6. Basis of the opinion
      1. Clients responsibility
      2. Auditors responsibility
   7. Critical audit matters

Specific controls that affect transaction processes will be documented in more detail. Items to include: - Cloud9 has a tightly structured system of performance reviews. Managers at each level must report financial and operating performance against budgets at regular intervals. - Higher-level managers can access information about activities within their area of responsibility for monitoring purposes through the information system. - Losses at retail stores have been contained following the installation of additional security, including cameras. - Testing showed a thorough approach to appropriate segregation of duties. Result \\#2 Tests of controls show that IT general controls are effective. As a result, application controls can be relied upon for their financial applications. Testing of the application controls showed operational effectiveness. Result \\#3 Javier and Cheyenne are pleased with the results of tests of controls related to the purchasing process. They found strong controls over the master vendor file, and vouchers are prepared based only on original invoices. Cloud9 is very careful about entering the right invoice number, including any leading zeros, so an invoice is not paid twice. Finally, under David Collier's direction, Cloud9 developed clear procedures for accruing payables for goods received in the warehouse for which vendor invoices had not yet arrived. Other Test Results Result \\# 1 Cloud9's lawyers state that there are no pending legal issues, so there is nothing we need to emphasize in that area. Cloud9 has had a decline in earnings this year, but that does not represent a growing concern. There are no consistency issues with Cloudg's application of accounting principles. So, we do not need to add an emphasis-of-matter paragraph to this year's audit report. Result \\#2 Cloud9 opened its first retail store which brings new inherent risks, such as the risk of theft of inventory, increased sales returns, and exposure to risk associated with leasing premises and equipment. Cloudg must design internal controls for a retail location that are different from its wholesale operations. These risks are not material to Cloud9's overall operations