ACC 410 Week 3 Assignment Internal Control Case

Apr 19th, 2015
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ACC 410 Week 3 Assignment Internal Control Case

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Highest Level of Deficiency Case - TutorialControl Deficiencies(Your Name)ACC410 Auditing(Instructor's Name)(Date)Control DeficienciesThe Statement of Auditing Standards No. 112 (SAS 112) issued new definitions of significant deficiency and material weakness that lowers the threshold for reportable control deficiencies. The three categories of deficiencies that may be identified during an external audit of financial statements are:Control deficiencies: Control deficiencies occur when the design or process of a control fails to allow managers or employees, during the normal performance of their duties, to prevent or identify misstatements in a timely manner. Materiality of the control deficiency is not only ascertained by the actual misstatement, but also by the potential dollar amounts that may also be misstated. Significant deficiencies: Significant deficiencies are control deficiencies that negatively affect a company's ability to initiate, authorize, record, process, or report financial data accurately in accordance with GAAP. With a significant deficiency there is more than a remote possibility that a misstatement of the financial statements will not be prevented or discovered. A significant deficiency is less severe than a material weakness, but important enough to warrant examination by those in charge of supervising the financial reporting.Material weakness: A material weakness is a control deficiency, or combination of control defic

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