[Anonymous]

Quick question regarding searching for control deficiencies. This is what Becker states.

Non-issuer financial statement audit – not required to perform procedures to identify deficiencies in internal control

Non-issuer integrated audit – not required to search for control deficiencies that are less severe than a material weakness

Issuer integrated audit – not required to search for control deficiencies or significant deficiencies

I understand that all deficiencies should be communicated if discovered, but I am confused as to what the auditor is required to search for any each of the following scenarios. Could someone shed some light on this?

[Thrawn]

In a non-integrated audit (just the F/S) the auditors are looking for misstatements and are testing balances, they are not relying on or testing internal controls. So they are typically going to focus almost exclusively on using substantive tests on the balances and transactions themselves.

In an integrated audit (F/S and IC) the auditors are testing both the balances on the financial statments as we as the internal control environment, so in addition to substantive proceedures they will test controls by gaining an understanding of the control environment and testing the effectiveness of those controls to make sure they are operating as intended.

BEC 87 Feb 14
REG 84 Apr 14
FAR 82 Nov 14
AUD 86 Feb 15

[Author]

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