Conducting a Successful Audit: Risk Assessment Factors and Internal Control Considerations

Author: Lynn Fountain

Since the impetus of Sarbanes-Oxley, focus on the need to follow a risk-based approach to the financial statement audit has been high on the agenda for auditors. In order to properly assess risk, auditors must have a strong understanding of the organization and its key risk factors along with the specific internal controls established to mitigate risks. When performing a financial statement audit, auditors are now required to critically evaluate internal controls that are key to addressing financial statement risk. They must examine both the design of the control as well as its operating effectiveness. This requires a strong understanding of internal control concepts and the COSO internal control framework. One key to a successful audit is establishing the proper risk-based framework to conduct the review. In addition, understanding all components of the internal control framework utilized by the organization is key to examining controls established to mitigate risk. In this course we will examine both a risk-based approach to conducting the financial statement audit as well as the COSO 2013 internal control framework and how it should be applied within the risk-based process.

Publication Date: October 2019

Designed For
External Auditors, CPAs performing compilation and attestation services, Accountants and Finance professionals, Internal auditors, Executive management/ Board members and Audit Committee members, and Legal and Compliance professionals.

Topics Covered

• Risk Based and Internal Control Considerations in a FS audit
• Execute the requirement to assess internal control through utilization of the COSO internal control framework
• Utilize concepts of internal control as a part of the risk assessment process
• Requirements of the financial statement auditor when an organization uses a service organization
• Methods to documenting the control assessment
• Assess and communicate identified deficiencies

Learning Objectives

• Recognize and apply proper risk based and internal control considerations in a financial statement audit
• Recognize appropriate methods to documenting the control assessment and assess and communicate identified deficiencies
• Identify the requirement to assess internal control through utilization of the COSO framework
• Describe and utilize concepts of internal control as a part of the risk assessment process
• Identify requirements of the FS auditor when an organization uses a service organization in the context of an entity's system of control
• Recognize which area is addressed through the issuance of SAS 110
• Identify an example of an operating deficiency
• Describe correct statements with respect to assessing internal control using COSO
• Identify a principle with respect to the control environment
• Identify the new term for "reportable condition" as prescribed by SAS 112
• Recognize the steps in applying the RA model

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
None

Advance Preparation
None