Report on Internal Controls
Statement of Accounting Standards requires the auditor to communicate, in writing, to management and those charged with governance, significant deficiencies and material weaknesses identified in an audit of financial statements. It is applicable whenever an auditor expresses or disclaims an opinion on financial statements.
Internal control is a process-effected by those charged with governance, management, and other personnel-designed to provide reasonable assurance about the achievement of the entity's objectives with regard to the reliability of financial reporting, effectiveness and efficiency of operations, and compliance with applicable laws and regulations. Internal control over the safeguarding of assets against unauthorized acquisition, use, or disposition may include controls related to financial reporting and operations objectives. Generally, controls that are relevant to an audit of financial statements are those that pertain to the entity's objective of reliable financial reporting.
The term financial reporting relates to the preparation of reliable financial statements that are fairly presented in conformity with generally accepted accounting principles (GAAP). In an audit of financial statements, the auditor is not required to perform procedures to identify efficiencies in internal control, or to express an opinion on the effectiveness of the entity's internal control. However, during the course of an audit, the auditor may become aware of deficiencies in internal control while obtaining an understanding of the entity and its environment, including its internal control, assessing the risks of material misstatement of the financial statements due to error or fraud, performing further audit procedures to respond to assessed risks, communicating with management, or otherwise. The auditor's awareness of deficiencies in internal control varies with each audit and is influenced by the nature, timing, and extent of audit procedures performed, as well as other factors.
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Certificate of Achievement for Excellence in Financial Reporting
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