3/20/2023 0 Comments Impact client controlsThis understanding (including the design and implementation of any changes in controls relevant to the audit) supports the identification of potential misstatements and factors that affect the risks of material misstatement. Regardless of whether the auditor plans to rely on the operating effectiveness of controls, they are still required to obtain an understanding of internal control relevant to the audit. Auditor's responsibility: Understanding the entity's components of internal control Ideally, information that describes the changes in controls and procedures should be approved prior to implementation and records of the changes should be maintained for audit purposes. if there were government-mandated lockdowns in the organization's country during the period covered by the engagement or other imposed lockdowns or distancing requirements that created the need for the change). Where changes to operations, systems and controls have been made as a result of the effects of COVID-19, the timing and reasons for the changes should be noted by management (e.g. Management is also responsible for making modifications to controls-or designing and implementing new controls-to mitigate assessed risks. ![]() ![]() When there are significant changes to systems and controls, management is responsible for identifying and assessing new risks that might arise from system changes. There may be areas where internal controls need to be modified or may not be enforced in the current environment. Management is responsible for designing, implementing and maintaining a system of internal control to provide reasonable assurance about the achievement of entity objectives with regard to reliability of financial reporting, effectiveness, and efficiency of operations, and compliance with applicable laws and regulations. Management's responsibility for controls and identification of COVID-19-related changes auditor's responsibility in understanding the entity's components of internal control.management's responsibility for controls and identification of COVID-19-related changes.With remote work arrangements, reduced personnel, business disruption, and a diversion of resources to focus on the health and safety of people and business viability, an entity's system of internal control and its various components has likely been impacted. But how has COVID-19 affected your clients' internal controls? ![]() Recent Audit Quality blogs have examined how COVID-19 has affected audit evidence, interim reporting, and going concern impacts. COVID-19 has disrupted entities across the globe and forced businesses to make significant changes to their operations.
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