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In discussing the facts and circumstances of the auditor’s findings with management, the auditor may obtain other relevant information for further consideration, such as: Management’s understanding of the actual or suspected causes of the deficiencies. …
While the concepts underlying control activities in smaller entities are likely to be similar to those in larger entities, the formality with which they operate will vary. Further, smaller entities may find that certain types of control activities are …
Also, smaller entities often have fewer employees which may limit the extent to which segregation of duties is practicable. However, in a small owner‑managed entity, the owner‑manager may be able to exercise more effective oversight than in a larger …
Examples of matters that the auditor may consider in determining whether a deficiency or combination of deficiencies in internal control constitutes a significant deficiency include: The likelihood of the deficiencies leading to material misstatements in …
Indicators of significant deficiencies in internal control include, for example: Evidence of ineffective aspects of the control environment, such as: Indications that significant transactions in which management is financially interested are not being …
Controls may be designed to operate individually or in combination to effectively prevent, or detect and correct, misstatements. [5] For example, controls over accounts receivable may consist of both automated and manual controls designed to operate …
Law or regulation in some jurisdictions may establish a requirement (particularly for audits of listed entities) for the auditor to communicate to those charged with governance or to other relevant parties (such as regulators) one or more specific types …
Where the jurisdiction has established specific terms for the types of deficiency in internal control to be communicated but has not defined such terms, it may be necessary for the auditor to use judgement to determine the matters to be communicated …