BU477 Lecture Notes - Lecture 14: Audit Risk, Financial Audit, Whistleblower
Document Summary
If assets are left unprotected, they can be stolen. In many small companies, it is not practical to segregate the duties to the extent suggested. In these cases, the auditor will likely choose to not rely upon internal controls. Very important: retention of data to comply with relevant business, audit, and regulatory needs, keep data on hand for about 7 years- cra requires it. I(cid:374)fo(cid:396)(cid:373)atio(cid:374) that goes out should(cid:374)"t (cid:271)e se(cid:374)siti(cid:448)e o(cid:396) p(cid:396)i(cid:448)ate: monitoring, principles for a strong control environment include, principle 16: selects, develops, and performs ongoingseparate. Is there appropriate segregation of duties: proper authorization, maintaining proper documents, etc, the auditor must evaluate whether the controls have been implemented. If management lacks integrity, most auditors will not accept the engagement or, in the case of a continuing client, will resign from the engagement. If the accounting records are deficient, necessary audit evidence may not be available and must be available to us.
