Learning Objectives

Be familiar with management's responsibilities for reporting on internal control under Section 404 of the Sarbanes-Oxley Act.

Understand the auditor's responsibilities for reporting on internal control under Section 404 of the Sarbanes-Oxley Act.

Know the definition of internal control over financial reporting.

Understand the difference between a control deficiency, a significant deficiency, and a material weakness.

Understand management's assessment process.

Understand the extent of management's documentation of internal control.

Know the framework used by management to assess internal control.

Be familiar with how auditors conduct an audit of internal control over financial reporting.

Understand how the auditor can use the work of others on an audit of internal control.

Know the written representations that the auditor must obtain from management.

Be familiar with the auditor's documentation requirements.

Know what information must be included in management's report on internal control over financial reporting.

Know the various types of reports that the auditor can issue.

Know the auditor's communication responsibilities on an audit of internal control over financial reporting.

Understand how the audits of internal control and financial statements are integrated, and the implications of each audit for the other.

Understand how to decide which locations or business units should be audited.

Understand how to obtain assurance on controls at a service organization that processes transactions for the entity.

Know management's and the auditor's responsibilities for controls that provide reasonable assurance for safeguarding company assets.

Be familiar with computer-assisted audit techniques.