Sas 112
By: Tasha • Essay • 553 Words • May 7, 2010 • 935 Views
Sas 112
Slide 1
- Evaluating control deficiencies is an important part of an audit and one of the unconditional requirements is that the auditor must evaluate identified control deficiencies to determine whether they are SD or MW.
- Individually and in Combo
- Significance - Depends on potential for misstatement and not whether or not it actually occurred.
- Absence of an identified misstatement does not provide evidence that identified control deficiencies are not SD or MW.
Slide 2
- When evaluating CD the auditor ?should? consider the likelihood and magnitude of misstatement. For SD or MW
Slide 3
- There are several factors that may affect the likelihood that a CONTROL could FAIL to prevent or detect a misstatement.
- One such factor is THE NATURE OF FS ACCTS, DISCLOSURES, AND ASSERTIONS INVOLVED. FOR EXAMPLE-suspense accts and related party transactions involve greater risks.
- The susceptibility of the related assets or liabilities to fraud or loss.
- The possible future consequences of the deficiency.
- The subjectivity and complexity of the amount involved and the extent of judgment needed to determine that amount.
-Some others include:
- The interaction or relationship of the control with other controls
- The interaction of a CD with another CD.
Slide 4
- As I stated before the auditor should evaluate CD individually and in combination to determine whether or not there is a SD or MW. This is because multiple CD that affect the same Account balance or disclosure increase the likelihood of misstatement and may in combo, constitute a SD or MW.
- Therefore, the auditor should evaluate individual CD that affect the same acct balance, disclosure, relevant assertion, or component of internal control.
Slide 1
- Evaluating control deficiencies is an important part of an audit and one of the unconditional requirements is that the auditor must evaluate identified control deficiencies to determine whether they are SD or MW.
- Individually and in Combo
- Significance - Depends on potential for misstatement and not whether or not it actually occurred.
- Absence