Understanding and Testing Internal Control

Description

Internal controls over financial reporting are used to prevent, detect, and correct misstatement. They also help to reduce the chance that fraud will occur. The auditor is required to obtain an understanding of an entity's controls as part of the risk assessment process. This workshop will provide participants with an opportunity to explore the design of controls over the significant systems typically found in a small- to mid-size client. Participants working in industry will find this course useful in challenging the level of internal controls currently implemented in their organizations. Participants will also learn to efficiently document their understanding of the controls and determine where it is either necessary or efficient to test them.

Highlights

COSO Framework
Understanding the design of controls at the entity level and at the activity (financial statement assertion) level with an emphasis on manual control activities
Determining whether controls have been implemented
Effective and efficient tests of controls
Multi-purpose tests
Documentation techniques
Use of service auditor reports (AU 402)
AU 265 reporting requirements

Objectives

Participants will be able to:
Apply the five COSO elements of internal control
Differentiate between understanding and testing internal controls
Document the understanding of internal controls at the appropriate level
Test and document the results of tests of internal controls
Issue an AU 265 report

Designed For

Audit practitioners working on audits of non-public companies
Accountants in industry who want to improve their entity's internal controls