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18 Cards in this Set
- Front
- Back
Report to SEC |
Then integrated report on the internal control as well over financial reporting |
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Controls relevant |
Safeguard assets & produce accurate financial statements |
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Internal controls objectives |
ACE Accurate & reliable financial reporting Compliance with laws & regulations Effectiveness & efficiency of operations |
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5 components of internal controls |
CRIME CONTROL ENVIRONMENT RISK ASSESSMENT CONTROL ACTIVITIES INFORMATION & COMMUNICATION MONITORING |
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Control environment |
Sets tone of organization CHOPPER Commitment to competence- sincere interest on part of employees in performing good work Human resources policies & practices- minimize difficulties created by new employees by sound hiring & training policies for employees Organizational structure- different internal control problems for different types company's Participation of those charged with goverance- an audit committee of board director that monitors internal control function produces more attentive management Philosophy of management & mgt style- the belief in it is important Ethical values & intergrity- Responsibilities assignment |
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Control activities |
PIPS Performance reviews Information processing Physical controls Segregation- ARCC Autorization Recording Custody Comparison |
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Procedures of testing controls |
RIIO Reperformance Inspection Inquiry Observation |
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When should controls be tested if haven't changed |
Once every 3 years |
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Material weakness |
A deficiency or combination of deficiencies reasonable possibility that material misstatement |
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Significant deficiency |
Less serve than a material weakness yet important enough to merit attention |
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How many days much significant or material weakness be communicated in? |
60 days |
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Must it be in writing |
Yes |
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To who do u issue |
Those charge with goverance & management |
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What must the report contain for financial statements audit |
Purpose- not to provide assurance on effectiveness of internal controls Definition of material weakness Limited use- not intended for others Auditors consideration of internal controls was not designed to identify all significant deficiencies or material weaknesses |
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SSAE 15 Attestation to examine internal controls |
Form an opinion as to the effectiveness of internal control over financial reporting |
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Must attestion to examine report be in writing |
Yes, within 60 days of report release date |
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What must report contain for internal control |
Independent Management responsibilities According to AICPA Management assertion Auditors responsibility Definition of internal control Opinion Date & signature report |
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PCAOB standard 5 |
Sames as SASSAE 15 Except does not report on efficiency or the effectiveness of internal control but reports on management's assessment of it & no date. Done with audit Both material weakness & significant deficiencies & control defencies should be reported prior to issuance prior to issuance In report include city & state In accordance with PCAOB Definition of material weakness different to GAAS, GAAS include "prevent, detect & correct" PCAOB doesn't have correct |