Test of Controls

Question 1

WHat should the auditor do if tested controls found to be deficient? 8

Answer 1

1. What inherent risks does the control address?
2. Consider whether it is a general or application control
3. Is the deficiency pervasive throughout the system? (consider sample testing)
4. Was the sample sufficient?
5. Is the deficiency an indication of fraud? If yes, consider Reportable Irregularity ISA250
6. If the deficiency is significant, consider reporting it to management and TCWG
7. Is the deficiency noted sufficient enough evidence NOT to rely on the operating effectiveness of the control? if yes, revert to substantive approach.
8. What substantive procedures are necessary to address this control deficiency