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© OECD 
A joint initiative of the OECD and the European Union, principally financed by the EU 
Tirana, 10-12 September 201...
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10.1 Weaknesses in controls 
•Control deficiency - control is missing or not good designed or does not operate as designed...
10.2 Steps to identify weaknesses 
•Identify existing controls 
•Identify absence of key controls (risk control matrix) 
•...
10.3 Next steps 
•Associate control deficiencies with related audit objectives 
•Assess control risk for each related obje...
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QUESTIONS? 
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Presentation 10, Defining weaknesses in controls of the system, Workshop on System-based auditing, Tirana, 10-12 Sept 2014_ENG

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Presentation 10, Defining weaknesses in controls of the system, Workshop on System-based auditing, Tirana, 10-12 Sept 2014_ENG

  1. 1. © OECD A joint initiative of the OECD and the European Union, principally financed by the EU Tirana, 10-12 September 2014 Workshop System Based Auditing 10 Defining weaknesses in controls
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  4. 4. 10.1 Weaknesses in controls •Control deficiency - control is missing or not good designed or does not operate as designed or controller is unqualified or unauthorised to perform control •Significant deficiency – one or more control deficiencies exist but not material weakness •Material weakness – significant deficiency results in possibility that IC will not prevent or detect timely misstatements in fin. statement 4
  5. 5. 10.2 Steps to identify weaknesses •Identify existing controls •Identify absence of key controls (risk control matrix) •Consider possibility of compensating controls (to offset absence of key control) •Decide whether there is a significant deficiency or material weakness (likely hood and materiality important) •Determine potential misstatement that could result 5
  6. 6. 10.3 Next steps •Associate control deficiencies with related audit objectives •Assess control risk for each related objective •Communicate significant deficiencies and weaknesses to management ------------------------- •Test of controls •Substantive testing 6
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  8. 8. QUESTIONS? 8

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