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· Inadequate design of internal control over the preparation of the financial statements being audited. · Inadequate design of internal control over a significant account or process.
· Inadequate documentation of the components of internal control. · Insufficient control consciousness within the organization, for example, the tone at the top and the control environment.
· Absent or inadequate segregation of duties within a significant account or process.
· Absent or inadequate controls over the safeguarding of assets (this applies to controls that the auditor determines would be necessary for effective internal control over financial reporting).
· Inadequate design of information technology (IT) general and application controls that prevent the information system from providing complete and accurate information consistent with financial reporting objectives and current needs.
· Employees or management who lack the qualifications and training to fulfill their assigned functions. For example, in an entity that prepares financial statements in accordance with generally accepted accounting principles, the person responsible for the accounting and reporting function lacks the skills and knowledge to apply generally accepted accounting principles in recording the entity’s financial transactions or preparing its financial statements.
· Inadequate design of monitoring controls used to assess the design and operating effectiveness of the entity’s internal control over time.
· The absence of an internal process to report deficiencies in internal control to
management on a timely basis.
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