Wiley Practitioner's Guide to GAAS 2020. Joanne M. Flood
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Название: Wiley Practitioner's Guide to GAAS 2020
Автор: Joanne M. Flood
Издательство: John Wiley & Sons Limited
Жанр: Бухучет, налогообложение, аудит
isbn: 9781119596035
isbn:
Timing
Communication of internal control related matters should be made no later than 60 days following the report release date. (AU-C 265.13) However, it is best to make this communication by the report release date in order to allow those charged with governance more time to discharge their oversight responsibilities. (AU-C 265.A16) For significant issues in need of immediate correction, the auditor may choose to communicate those issues during the audit and can do so other than in writing; however, even if remediated, these issues should still be included in a written communication at the end of the audit. (AU-C 265.A17)
Content
The written communication should include the following items:
Definitions of material weakness and significant deficiency
Description of significant deficiencies and material weaknesses and their potential effects
Information that enables those charged with governance and management to understand the context of the communications, particularly statements that:The auditor is expressing an opinion on the financial statements.The audit included consideration of internal control in order to design audit procedures, not for the purpose of expressing an opinion on internal control.The auditor is not expressing an opinion on the effectiveness of internal control.The auditor’s consideration of internal control may not identify all significant deficiencies or material control weaknesses.
An appropriate alert in accordance with AU-C 905, Alert That Restricts the Use of the Auditor’s Written Communication
(AU-C 265.14)
The content of the communication can contain additional topics, such as recommendations for improvement in such areas as administrative or operational efficiency, as well as less than significant deficiencies or immaterial weaknesses. (AU-C 265.A30) The auditor may also note the general inherent limitations of internal control, including the possibility of management override of those controls. It may also be acceptable to specifically describe the extent of the auditor’s consideration of internal control. (AU-C 265.A31)
The auditor may be asked to issue a communication indicating that no material weaknesses were identified, which then would be submitted to governmental authorities. The “AU-C 265 Illustrations” section contains a sample communication that may be used.
MANAGEMENT RESPONSE
Management may prepare a written response to the auditor’s communication. Such responses typically describe corrective actions taken, plans to issue new controls, or management’s belief that the cost of new controls exceeds their benefit. If this response is included in a document that also contains the auditor’s controls communication, the auditor may include a disclaimer paragraph, such as:
ABC Company’s written response to the significant deficiencies [and material weaknesses] identified in our audit was not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.
(AU-C 265.A33)
INTERPRETATIONS
Communication of Significant Deficiencies and Material Weaknesses Prior to the Completion of the Compliance Audit for Participants in Office of Management and Budget Single-Audit Pilot Project
Section 265 permits an auditor to communicate deficiencies and material weaknesses in writing to management before completing a financial statement audit, and this also applies to a compliance audit under OMB Circular A-133. (AU-C 9265.01)
Communication of Significant Deficiencies and Material Weaknesses Prior to the Completion of the Compliance Audit for Auditors Who Are Not Participants in Office of Management and Budget Pilot Project
If the auditor decides to communicate with management regarding any significant deficiencies or material weaknesses in internal control, the auditor is encouraged to communicate promptly during the audit engagement. The auditor may do so using the guidelines in AU-C 265, Communicating Internal Control Related Matters Identified in an Audit. (AU-C 9265.04–.05)
Appropriateness of Identifying No Significant Deficiencies or No Material Weaknesses in an Interim Communication
In the scenarios in these interpretations, the auditor should not issue a written communication stating that no significant deficiencies were identified during an audit as of an interim date, only at the end of an audit. (AU-C 9265.09)
AU-C 265 ILLUSTRATIONS
Illustration 1. Examples of Circumstances That May Be Control Deficiencies, Significant Deficiencies, or Material Weaknesses
The appendix to Section 265.A37 lists the following as examples of circumstances that may be control deficiencies in the design of controls, or failures in the operation of internal control. As such, auditors should consider these matters when designing and performing risk assessment procedures to gain an understanding of the design and implementation of internal control and when performing and evaluating the results of further audit procedures.
Deficiencies in Internal Control Design
Inadequate design of internal control over the preparation of the financial statements being audited.
Inadequate design of internal control over a significant account or process.
Inadequate documentation of the components of internal control.
Insufficient control consciousness within the organization—for example, the tone at the top and the control environment.
Absent or inadequate segregation of duties within a significant account or process.
Absent or inadequate controls over the safeguarding of assets (this applies to controls that the auditor determines would be necessary for effective internal control over financial reporting).
Inadequate design of information technology (IT) general and application controls that prevents the information system from providing complete and accurate information consistent with financial reporting objectives and current needs.
Employees or management who lack the qualifications and training to fulfill their assigned functions (for example, in an entity that prepares financial statements in accordance with generally accepted accounting principles [GAAP], the person responsible for the accounting and reporting function lacks the skills and knowledge to apply GAAP in recording the entity’s financial transactions or preparing its financial statements).
Inadequate design of monitoring controls used to assess the design and operating effectiveness of the entity’s internal control over time.
The absence of any internal process to report deficiencies СКАЧАТЬ