[goforCPA]

Is test of internal controls required for:

1) Review of a Non-issuers Interim financials (SAS)?

2) Audit of Non-issuers (SAS)?

If the answer to 1) and/or 2) is “No” than is understanding of Internal Control required in either or both cases?

October 2011-May 2013. Did not loose any credit!!
AUD - 73, 79
REG - 86
FAR - 72, 83
BEC - 80, last one, DONE!!

[Anonymous]

1) There are no testing Internal control testing for Reviews, just Analytical Procedures and Inquiry.

2) Testing for Operating effectiveness is not required for any audit (unless there is heavy IT) if you find it inefficient and/or Internal Controls are bad and you can't rely on them. If it's cost efficient to do substantive testing only then you do that and don't test Internal Controls.

[SoCalCPA]

Jack is correct =)

But I believe understanding of IC is required for both review and audit of non-issuers & issuers. Especially for audit, during planning stage.

B - (4/2012)
A - (5/2012)
R - (1/2012) Done!
F - (10/2011) Done!

[Anonymous]

For Non-issuers, testing controls is only required if the auditor seeks to lower his assessment of control risk. The only way the auditor can document that control risk is below the maximum is if the auditor tests the controls and the controls pass the test.

Darius

CPAexamTutoring

[SoCalCPA]

Cpaexamtutoring, how about for issuers? Thanks!

B - (4/2012)
A - (5/2012)
R - (1/2012) Done!
F - (10/2011) Done!

[goforCPA]

thanks for all your replies. To clarify then regardless of issuer or non_issuer during audit testing of internal controls is only considered when

1) there the control risk is set low by the auditor, i.e. controls are operating effectively OR

2) there is extensive use of IT by the entity.

For review (issuer or not), only understanding of internal controls is required. There are no tests of controls.

Is this accurate?

October 2011-May 2013. Did not loose any credit!!
AUD - 73, 79
REG - 86
FAR - 72, 83
BEC - 80, last one, DONE!!

[Yvonne570]

Only issuers are required to have a test of internal controls. Small issuers have an exception. Non-issuers are optional – yet reporting is tricky as this is more internal use.

Private companies – non-issuers follow SSAE (examination of internal control – which will be integrated with the audit). Optional. SAS is the guidance for the audits of non-issuers – which does not provide for an opinion on internal controls; however, one must obtain an understanding to assist with the audit. If such deficiencies are found, the auditor has a reporting responsibility – guided by SAS.

Public companies – issuers follow PCAOB and it's required as an integrated audit with internal controls – opinions for both audit and internal controls.

AUD - Passed:)
FAR - Passed:)
REG - Retake TBD
BEC - Missed by 3 points Retake TBD

[goforCPA]

Thanks Yvonne…this helps……

Could you please comment on the requirement for review? Is only understanding of internal control required for review of issuer and non-issuer?

October 2011-May 2013. Did not loose any credit!!
AUD - 73, 79
REG - 86
FAR - 72, 83
BEC - 80, last one, DONE!!

[Author]

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