As auditors (internal and external), we are required by standards or by law or by client’s request to assess the adequacy and the effectiveness of internal controls. For example, in
1. Deficiencies in Internal Control over Operations, Compliance, and Reporting other than External Financial Reporting: Major Non-conformities: Example of MAJOR non-conformity:
Example of MINOR non-conformities:
2. Deficiencies in Internal Control over Financial Reporting (ICoFR): Material Weaknesses:
Example of material weaknesses: Each of the following is an indicator of a control deficiency that should be regarded as at least a significant deficiency and a strong indicator of a material weakness in internal control:
Example of significant weaknesses: Deficiencies in the following areas ordinarily are at least significant deficiencies in internal control:
1. Deficiencies in the Design of Controls:
We will discuss about simple practical guide how to assess the adequacy of internal control in our next posting.... |