ACCT 475 Lecture Notes - Lecture 13: Saks Fifth Avenue, Zzzz, Busboy

• School: McGill University
• Department: Accounting
• Course: ACCT 475
• Professor: Kevin Paul Parent

Document Summary

Chapter 7: gai(cid:374)i(cid:374)g a(cid:374) u(cid:374)dersta(cid:374)di(cid:374)g of the clie(cid:374)t"s syste(cid:373) of i(cid:374)ter(cid:374)al. I(cid:374)ter(cid:374)al (cid:272)o(cid:374)trol e(cid:374)(cid:272)o(cid:373)passes the e(cid:374)tity"s resour(cid:272)es, syste(cid:373)s, processes, culture, structure and tasks. When controls are effective, the entity is more likely to achieve its strategic and operating objectives. The auditor fo(cid:272)uses o(cid:374) (cid:272)o(cid:374)trols (cid:449)ith a dire(cid:272)t i(cid:373)pa(cid:272)t o(cid:374) the e(cid:374)tity"s fi(cid:374)a(cid:374)(cid:272)ial reporti(cid:374)g, compliance, and asset safeguarding. Internal controls come from different agencies: start from management (those with governance, path that you put out for yourself to achieve strategic objectives. Make sure public is not at risk, how customers board the plane, first choice carrier for passengers (their objective: assertions (existence, ownership, etc. ) always in perspective with financial statements: before we get to transactions and disclosures, we need to go through internal controls. Is a(cid:374) e(cid:374)tity"s i(cid:374)ter(cid:374)al (cid:272)o(cid:374)trol effe(cid:272)ti(cid:448)e as it relates to re(cid:272)ordi(cid:374)g of transactions and balances: effective internal control meets the following objectives: