What control activities are applicable to a financial statement audit
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What control activities are applicable to a financial statement audit

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What control activities are applicable to a financial statement audit What control activities are applicable to a financial statement audit Document Transcript

  • WHAT CONTROL ACTIVITIES ARE APPLICABLE TO A FINANCIAL STATEMENT AUDIT Summary: Management is responsible for implementing effective internal control and for providing reasonable assurance that accounting data is accumulated, recorded, and reported properly and that assets are safeguarded. Internal control activities is applicable financial for financial statement or corrective actions to material weaknesses the reported in prior year audits that affect the financial statements. Financial management start in the critical areas of cash management and bookkeeping, which should be done according to certain financial controls to ensure integrity in the bookkeeping process so that Internal control obtain sufficient evidence to support an opinion on internal control over financial reporting. The corporate governance and risk management; and internal control forms the third component of this stool. Good governance is dependent on a management that understands the risks it faces and is able to keep control of the business that internal control is the most important and fundamental concept An Audit of Internal Control over Financial reporting that is integrated with an Audit of Financial Statements Effective internal control over financial reporting exists when there are no materials Weaknesses. The auditor must obtain reasonable assurance that no material weaknesses exist in internal control over financial reporting. Internal are most applicable to establish the requirements for performing an audit of management’s assessment of the effectiveness of internal control over financial reporting. Management’s assessment is integrated with an audit of the financial statements. When effective internal controls are not in place and not applied day in and day out to every transaction, minimal reliance can be placed on the resulting financial statements and reports. Management is responsible for implementing effective internal control and for providing Reasonable assurance that accounting data is accumulated, recorded, and reported properly and those assets are safeguarded. Internal control over financial reporting; therefore, internal control review to following up on the status of corrective actions related to material weaknesses in prior year audits that affect the financial statements. The control activities are applicable when the following financial statements are not materially misstated, there may be one or more material weaknesses in internal controls over financial reporting. • Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company. • Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, 1
  • • Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Conclusion: the effective systems of internal financial controls do not exist, are weak, or are ignored altogether; accurate and timely agency accounting and reporting is a nearly impossible task. the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those Policies and procedures. . 2