ACCP308 - Chapter 1 Auditing and Internal Control

Audit Implications of SOX

1. Expanded role of auditors:
2. PCAOB Standard No. 5 requires auditors to understand:
3. Auditors responsible for detecting fraudulent activity.

Expanded role of auditors

* Must attest to quality of client organization’s internal controls with a separate audit opinion.
* Possible to render a qualified opinion on controls and an unqualified opinion on financial statements.

PCAOB Standard No. 5 requires auditors to understand

Transaction flows including controls pertaining to how transactions are initiated, authorized, recorded, and reported.

Components of IT Controls

1. Application controls
2. General controls