Acc3005 Taxation|Design And Implementation Assessment Answer
Question
Many auditors have begun to turn their sights to their next group of audits: clients with 2020 fiscal year ends. The World Health Organization declared a public health emergency on Jan. 30, 2020, meaning many of these clients will have been affected by the COVID-19 pandemic during the period under audit.
When states issued stay-at-home orders in March and April, many entities were presented with a new reality. As they shifted from the office environment to remote working, and as financial reporting processes moved from in-person to virtual, the risk of breakdowns in internal control was heightened.
Auditors are required to evaluate the design and implementation of controls relevant to the audit for each client. To determine whether a control is relevant to the audit, auditors should exercise their professional judgment. Auditors should consider what could go wrong from a financial reporting perspective and whether certain controls can mitigate those risks.
Required
Discuss the importance of implementing effective internal controls in organisation. In addition, evaluate the impact of breakdown in internal control on external audit, justifying your arguments with relevant literature and case studies/example
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