In every audit, the auditor is required to identify and assess the risks of material misstatement, whether due to fraud or error, in the financial statements. This process includes understanding the entity and its environment, including the entity's internal control, thereby providing a basis for designing and implementing responses to the assessed risks of material misstatement. This program explores efficient ways to conduct audits (primarily for private companies), including a discussion of the applicable standards and their requirements.
- Privately-owned companies present numerous challenges to the auditor when attempting to determine the audit risks that exist, as follows:
- Are there identifiable controls that exist, and if so, are they documented?
- Is the lack of segregation of duties a major internal control weakness?
- Is there evidence of management override of existing controls?
- Does ownership/management determine estimated amounts in the financial statements without bias?
- Does ownership/management perform the required procedures to determine if a going concern exists?
- Do those charged with governance take responsibility for internal control over financial reporting?
- To assist auditors in designing and performing sufficient audit procedures required for all audits, particularly when auditing privately-owned companies' There will be a presentation, review and explanation of recently issued audit standards that need to be implemented. In addition, the program will explore and discuss best practices on how to:
- Identify controls that exist, especially when those controls are not clearly identified
- Evaluate if those controls prevent or detect material misstatements in the financial statements
- Design effective audit procedures (including testing of controls where appropriate) in response to the auditor's assessed risk of the potential material misstatements in the financial statements