MGMT 138 Study Guide - Final Guide: Engagement Letter, Quality Control, Kpmg
Document Summary
Identify audit objective/assertion: associate control risk with audit objective, assess control risk, design and execute audit process, test effectiveness of internal control. Inspection of documents and reports indicating performance of policies and procedures: observation of application of controls, reperformance by auditor of policies and procedures to a sample of transactions or balances, evaluate results of control tests, classifications of deficiencies. In non-statistical approach, auditor must use judgement to determine sampling risk to make sample size and sample evaluation decisions: with statistical sampling, the auditor can quantify sampling risk. Independent of the source; the more independent the more quality: credibility, reliability, accuracy, competency, appropriateness. Internal control framework: coso: 5 components: control environment, risk assessment, control activities, information and communication, monitoring, risk assessment: businesses risk (external and internal), compliance risk and financial reporting risk. I(cid:374)spe(cid:272)ts a sa(cid:373)ple of (cid:271)a(cid:374)k deposit slips to e(cid:374)sure that the (cid:272)o(cid:374)troller"s sig(cid:374)ature is o(cid:374) the slips indicating approval of the deposit.
