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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.
Last updated/reviewed: November 18, 2019
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
49 Reviews (202 ratings)Reviews
Anonymous
(internal auditor)
love this author. smart content. smart questions
Anonymous
(DIRECTOR)
This is a good course. It provides a lot of helpful information. The examples provided are hrlpful for the better understanding of the topics. The time allotted is about right and the materials used are good. The instructor displayed that she is very knowledgable of the topics discussed all throughout the session.
Anonymous
(Sr. Director of Cost Management and Comp..)
Comprehensive overview of SOX discussion of determination of internal control deficiencies and classification as to significant or material weakness. Use of several examples helped drive home the often times subjective nature of these determinations and critical factors to evaluate.
Anonymous
(-)
Another great course from Lynn Fountain with regard to internal control. Full of guidance as well as real world situations. Feedback from PCAOB study was an excellent wrap up to this course.
Anonymous
(Lead IT Auditor)
This was a helpful discussion about the difficulties in how to classify deficiencies as significant and whether they aggregate to a material weakness. I found the actual examples helpful.
Anonymous
(None)
Good course that provided interesting examples to help both illustrate the differences been a MW & SD and provide further insight into specific cases of organizations' recent MWs.
Anonymous
()
This course was great at explaining why the determination of materiality is not always easy. The real-life examples were great and were a great addition to the presentation.
Anonymous
(Manager SOX & Accounting)
This course included more examples of applying the concepts than prior courses which is very helpful. Course provides concepts that I really did not think about.
Anonymous
(SOX process manager)
Great thorough overview of evaluating deficiencies - I really appreciated how Lynn used multiple examples to help one gain a better understanding on this area.
Sou-Der Su
(Consultant at DLC Group)
This session is well organized and gives a thorough review of auditors' and management's responsibility and recent trends in assessment and reporting of ICFR.
Anonymous
(Project Manager)
Overall the course was a great overview of evaluating deficiencies. The instructor provides great detail on how to distinguish between a SD and a MW.
Jennifer Pawliw
(Associate Auditor at Berkshire Bank)
Good course with a lot of useful information. Examples really helped understand difference between material weakness and significant deficiency
Thomas Hayes
(Clinical Associate Professor at University of Arkansas)
I like the way Lynn organized the course. It surprised how much I still have to learn about SOX. Anyone teaching auditing would benefit.
Will Nystrom
( at BMC Investments/BLDG Management)
Great course. The instructor did a great job giving a good overall knowledge of material weaknesses from SOX. Great job teaching!
Anonymous
()
Very good information, glad I took this course. Engaging instructor and relevant slides, will keep information for later use.
Kevin Murray
(Manager of Finance at NYSTRS)
A good outline to determine the severity of control failures. There were good real life examples of failures illustrated.
Anonymous
(Consultant)
Really enjoy this instructor's courses related to SOX. She seems really knowledgeable and provides practical examples.
Anonymous
(Consultant)
Very informative course on material weaknesses and significant deficiencies and the differences between the two.
Debra Salisbury
(controller at New Century Health)
Great course! The information is presented in a manner that is easy to understand. Examples are very helpful.
ERIC ABAIDOO
( at Tullow Oil)
I enjoyed the course.I also struggled with the questions.
Overall it was an excellent delivery again by Lynn.
Anonymous
()
This course brings clarity to a tough subject and helps seasoned accountants build on their knowledge base.
Anonymous
(Internal controls manager)
I liked very much the examples that were introduced by the trainer as it gave more insight to the topic.
Paul Hong
(Supervisor at RSM)
This training helped to solidify concepts that I have dealt with before but did not fully conceptualize.
Mandy Wong
(Consultant at DLC Group)
Overall great webinar. It would be helpful to reduce the number of abbreviations in the slides though.
Johanna Gierl
(SOX at Cisco)
Very important reminders and technical guidance on what to do when evaluating control deficiencies.
Anonymous
(Internal Audit Manager)
Well structured review that includes several examples that illustrate the topics under discussion.
Anonymous
(Controller)
This was a great refresher on what the best way to articulate the differences between a SD and MW.
Joy Franklin
(Auditor at Assurant)
This course was very informative and gave a good comparison to identify between an SD and a MW.
Sam Grosoff
(Associate at RSM)
I beleive I learned a lot from this course and I am thankful I took the time to learn about it.
Anonymous
(CPA)
This course was excellent and provided important information that I will utilize in the future.
Lilian Dendrinos
(consultant at DLC Group)
Yet another great course. I've taken all of Lynn's SOX classes and they have all been great.
Anonymous
()
Very interesting class. Really appreciated the examples to assist in my understanding
Anonymous
()
Believed course was presented well and met objectives. Good coverage of subject matter.
Anonymous
(Controller)
This another excellent course from an amazing instructor. You won't be disappointed.
Sharon King
(Contractor at Self employed)
This course was a great refresher on some of the challenges associated with SOX.
Kirit Kapadia
( at Kirit KapadiaCPA)
Describing significant recents developments in material weakness and deficiancy
FABIO PASTENA
(internal controls leader at ge)
Excellent review of deficiency impacts and logic from the PCAOB, SEC and AICPA.
Karen Hemminger
(Consultant at Arizona Public Service Company)
It is a very good overview of Audit requirements, SOX and Material Impacts
Anonymous
(Manager)
Great course for current SOX relevancy and its impact on an organization.
Sarah Nikas
(Finance Controls and Compliance Lead at Cargill)
Good information, easy to understand. Overall enjoyed the whole course.
Anonymous
(Supervisor, Technology Risk Consulting)
this course was great and helped better my understanding of the subject
Paulo Sitoe
(Internal Auditor at Nokia)
Great recap about Material Weakness and Deficiency aggregation.
Anonymous
(Program Management)
The illustrations were easy to understand and very useful.
Anonymous
(Staff Operations Auditor)
This was a great course with a lot of useful information.
Anonymous
(Auditor)
Great review of SOX materiality concepts and definitions.
Chris Hole
(Director of Internal Audit at Supreme Industries)
Nice overview of assessing severity of deficiencies.
Anonymous
(SOX Senior Auditor)
A lot of very helpful information in this course.
Randy Maddox
(Internal Control Senior at Jack Cooper Transport)
The examples were very helpful.
Anonymous
(Financial Analyst)
Good
Prerequisites
Course Complexity: Intermediate
No Advanced Preparation or Prerequisites are needed for this course.
Education Provider Information
Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Where can I find the presentations for this course, please
Jacqueline: Presentation files are located under "Supporting Materials" for each course.