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Misstatements and internal control deficiencies

AUD Chapter 24 · Area III · Blueprint III.F

Near the end of the audit the auditor adds up everything that was found and asks two questions: are the statements still materially misstated, and what do these errors say about the client's controls? The Blueprint has four tasks here, rising from preparing the summary to evaluating deficiencies. The summary of misstatements is a classic simulation.

In this chapter

1. Accumulate everything that is not clearly trivial
2. Ask management to correct them
3. Evaluating uncorrected misstatements
4. Prior-year misstatements: rollover and iron curtain
5. Closing the loop on uncorrected misstatements
6. From misstatement to control deficiency
7. Deficiencies change the audit

This chapter has 7 lessons, 50 practice MCQs with explanations and 20 simulations, plus flashcards and a recall sheet.

What this chapter covers

• Summary of corrected and uncorrected misstatements
• effect on the statements
• effect on ICFR
• classifying deficiencies

Chapter 23: Matters that need special consideration · Chapter 25: Written representations and subsequent events