9 Internal Control Communications & Reports Flashcards
1
Q
What are the steps an auditor completes to perform a walkthrough of procedures?
A
- inquiry of appropriate personnel
- observation of operations
- inspection of relevant documentation
- reperformance of controls
2
Q
What is a walkthrough?
A
The following through of a transaction through a process.
3
Q
Why are walkthroughs performed?
A
To evaluate the design effectiveness of controls
4
Q
What should an auditor do if the assessment accompanying the auditor’s report includes a statement that the cost of corrective action exceeds the benefits of implementing new controls?
A
The auditor should include language that disclaims an opinion on the cost-benefit statements in an other-matter paragraph. If the weaknesses are material the auditor should express an adverse opinion on the effectiveness of internal control.
