[Anonymous]

Okay I am confused.. I’m studying with Becker if that matters.

The standard report on the audit of an issuer includes a sentence that states the auditor’s responsibility is to consider internal control when designing the audit, but NOT to express an opinion on the effectiveness of internal control…

In the A5 unit, it says that an integrated audit is REQUIRED for issuers, which involves … getting the internal control audited in addition to the financial statements audited?

I’m just really confused by this, as I feel like other MCQs I have done were correct when I answered that no opinion on the effectiveness of internal control is expressed, but now it is saying an opinion IS expressed.

Can someone help me find out what it is that I am not getting here?

[barelystayingsane]

I have not gotten to A5 yet, so I may not be in the best position to help you, but I seem to recall from my auditing class in college last semester that an audit of internal controls is always done for issuers. Where specifically does it say that the report for issuers does not include an audit of IC? I glanced through A1 rather quickly (since that is where I remember most of the reports being located), and most of the examples dealt with accordance with GAAS/SAS (i.e., nonissuers), not PCAOB standards.

[Anonymous]

Thanks for replying

My problem is that it says in the standard audit report that no opinion is expressed on internal control, but if an integrated audit is required (which includes an opinion on internal control), why would these conflicting requirements exist? Sorry if it doesn't make sense, but that is what I am having issues with.. putting the pieces together.

[barelystayingsane]

So on page A1-13, in (1) towards the bottom of the page, it says that that verbiage “should be omitted if the auditor does have a responsibility to express an opinion on the effectiveness of internal control in conjunction with the audit of financial statements.” So basically if you're auditing an issuer under the PCAOB standards, you have to make some adjustments to the standard audit report. Just like how you would have to make an adjustment by saying you conducted the audit in accordance with the standards of the PCAOB, rather than in accordance with GAAS.

I believe that the standard report is just a very basic baseline for an audit report under GAAS. You then would make adjustments as necessary.

[Anonymous]

Wow! Totally missed that subparagraph, and now it makes sense. Thank you so much for your help – my brain can now accept it and continue studying. 🙂

[Author]

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