Author Question: When a compensating control exists, the absence of a key control (Read 75 times)

knightj · **on:** Aug 21, 2022

Question 1

To determine if significant internal control deficiencies are material weaknesses, they must be evaluated on their
◦

Likelihood	Significance
Yes	Yes

◦

Likelihood	Significance
No	No

◦

Likelihood	Significance
Yes	No

◦

Likelihood	Significance
No	Yes

Question 2

When a compensating control exists, the absence of a key control
◦ is no longer a concern because there is no longer a significant deficiency or material weakness.
◦ is still a major concern to the auditor.
◦ could cause a material loss, so it must be tested using substantive procedures.
◦ is magnified and must be removed from the sampling process and examined in its entirety.

hiyayyay · **Reply #1 on:** Aug 21, 2022

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