
Per Auditing Standard 5 (AS5), the auditor must evaluate the severity of each control deficiency to determine whether the deficiencies, individually or in combination, are material weaknesses. The key question to ask is…what parameters should be considered when determining materiality?
In planning and performing the audit, the auditor is not required to search for deficiencies that, individually or in combination, are less severe than a material weakness. There are several definitions of materiality utilized in the profession that are promulgated by the American Institute of Certified Public Accountants (AICPA), Public Company Accounting Oversight Board (PCAOB), Committee of Sponsoring Organizations (COSO) and others.
This course covers several aspects about the concepts of material weakness and significant deficiency. We evaluate recent cases of material weakness disclosures and updates from the PCAOB.
Learning Objectives
- Evaluate the various definitions of deficiencies utilized by the Committee of Sponsoring Organizations, Audit Clarity Standard 325 and Auditing Standard 5.
- Identify methods to assess deficiency impact and distinguish between a significant deficiency and a material weakness.
- Explore the concept of deficiency aggregation.
- Explore indicators of a material weakness and examine risk factors for considering the severity of a deficiency through utilization of relevant examples.
- Examine requirements for deficiency communication.
- Explore the history of disclosed deficiencies and financial re-statement study.
- Explore PCAOB current priorities and released updates.
Included In Certifications
This course is included in the following Certification Programs:
17 CoursesSarbanes-Oxley (SOX) Certification
- Sarbanes Oxley (SOX) Overview
- SOX: Authoritative Bodies
- Sarbanes-Oxley (SOX) Standards - Evolution
- Information Technology General Controls Primer
- COSO 2013 Overview
- Sarbanes-Oxley (SOX) Section 404
- Sarbanes-Oxley Section 302: ICFR
- Sarbanes-Oxley (SOX) And Fraud Sections
- Sarbanes-Oxley (SOX) - Top Down Risk Assessment Part 1
- Sarbanes-Oxley (SOX) - Top Down Risk Assessment Part 2
- Sarbanes-Oxley (SOX) - Entity Level Controls
- Sarbanes-Oxley (SOX) Identifying and Documenting Controls
- Sarbanes-Oxley (SOX) Testing
- Sarbanes-Oxley (SOX) - Information Technology Controls
- Sarbanes-Oxley (SOX) - Assessing Material Impact
- XBRL - Connection to SOX 302/404 and Critical Roles
- Tools For Sarbanes-Oxley Compliance
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Prerequisites
No Advanced Preparation or Prerequisites are needed for this course.
Where can I find the presentations for this course, please
Jacqueline: Presentation files are located under "Supporting Materials" for each course.