ACC 821 Lecture Notes - Lecture 6: Internal Control, Audit Risk, Deferral

• School: Ryerson University
• Department: Accounting
• Course: ACC 821
• Professor: Ken Caplan

Document Summary

Part 11 accounting standards for private enterprises. Pe apply either: made in canada standards (part 11), or, ifrs. Simplification of recognition, measurement and presentation in areas that were identified as being overly complex, particularly accounting for financial instruments. Certain accounting options are available in part 2 standards for reporting pe: eg subsidiaries at cost or equity, taxes payables basis. Concentration of decision-making power in owner manager. Lack of certain formal systems and authorization proceudres. Limited knowledge of accounting and financial reporting among personnel. Entity is not dominant in the industry. General issues (these, apply to all entities: inadequate accounting records, certain controls do not exist, possible basic disregard for sound business practices, integrity of mgmt. Main issues for the auditor: completeness, mgmt. override of internal controls, what controls are actually in place, owner-manager looks at or reviews most transactions depending on size of entity. Address above issues by normal auditing standards.