48AU-C 940 An Audit of Internal Control over Financial Reporting That Is Integrated with an Audit of Financial Statements

Scope

Definitions of Terms

Objectives of AU-C 940

Requirements

Required Conditions for Engagement Acceptance

Evidence Supporting Management’s Assessment

Integrating the Controls Examination with the Financial Statement Audit

Risk Assessment

Using the Work of Others

Planning the Engagement

Use a Top-Down Approach

Testing Controls

Evaluating Control Deficiencies

Forming an Opinion

Reporting Requirements

Adverse Opinions

Report Modifications

Other Topics

AU-C 940 Illustrations

Illustrations 1–5: Illustrative Auditor’s Reports (AU-C 940.A165)

Illustration 6: Illustrative Written Communication of Significant Deficiencies and Material Weaknesses (AU-C 940.A156)

Illustration 7: Illustrative Management Report (AU-C 940.A157)

SCOPE

AU-C 940 guidance applies only when:

  • An auditor is engaged to perform an audit of ICFR, and
  • That audit is integrated with the financial statements audit (integrated audit).
  • (AU-C 940.01)

DEFINITIONS OF TERMS

Source: AU-C 940.05. For definitions of the terms related to this section, see Appendix A, “Definitions of Terms”: Audit of ICFR, Control objective, Criteria, Detective control, Internal control over financial reporting (ICFR), Management’s assessment about ICFR, Preventive control.

OBJECTIVES OF AU-C 940

AU-C Section 940.04 states that the objectives of the auditor in an audit of ICFR are to:

  1. obtain reasonable assurance about ...

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