ACTG 2011 Study Guide - Cash Flow, Contingent Liability, Effective Interest Rate
Document Summary
Justify based on users" needs and objectives and constraints. Identify significant control weaknesses: a weakness is a control that does not exist or has not been effectively designed. Explain the risk associated with each control weakness: risk is the potential loss the business might experience because of the weakness. Provide a recommendation to address each weakness: recommendation should reduce risk to appropriately low level. Discuss the impact of the control assessment on the decision to invest: are the control risks too great to justify investing, if the control system is ineffective, can our recommendations. Issue can be an accounting policy or assumption. Revise the financial information based on the recommendations: prepare an exhibit to demonstrate the quantitative impact of your recommendations. Conclude as to whether the financial information is materially misstated. Plan or review an assurance agreement (assurer only!) Issue can relate to scope, materiality, procedures, etc. Conclude as to the overall impact of issues on engagement.