In this course, we will explore how auditors identify and assess the risks of material misstatements by gaining a comprehensive understanding of privately owned companies and their unique challenges. Key questions we will address include: Are identifiable controls in place? Do owners and managers actively promote compliance with company policies? Have they documented these controls and effectively communicated them to staff? Are these controls observable and testable for operating effectiveness? Additionally, do owners and managers monitor employee performance and evaluate the effectiveness of the controls implemented?
Learning Objectives
• Recognize high-risk areas applicable to private companies
• Determine the best approach to deal with private company shortcomings in control activities
• Identify the appropriate risk assessment procedures in the circumstances
Major Topics
• Review of applicable auditing standards for risk assessment
• Update for SAS #145
• Identification and discussion of high-risk audit areas
• Discussion and analysis of control risk vs. inherent risk
• Practical approach to auditing companies where controls are minimal or not adequately documented
• Detailed discussion and examples of risk assessment procedures and alternative approaches
