AS5_Lorman_CAS 16-23

AS5_Lorman_CAS 16-23 - © 2007 KPMG LLP a U.S limited liability partnership and a member firm of the KPMG network of independent member firms

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Unformatted text preview: © 2007 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. • Click to edit Master subtitle style ADVISORY • Auditing Standard No. 5 and the SEC’s Interpretive Guidance • September 2007 © 2007 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. • Risk assessment example – inventory • Background • Companies ABC and XYZ are both publicly-held, multinational manufacturers, subject to Section 404 of the Sarbanes-Oxley Act of 2002. Both companies’ corporate offices are located in North America, and they have manufacturing operations in North America, South America, and Europe. Additionally, they have consigned Controls that Address Financial Statement Assertion Risk of Control Failure Misstatement Risk of Assertions Completeness (C) H L Existence (E) H M Rights and Obligations (RO) M M Valuation (V) H H Presentation and Disclosure (PD) L L © 2007 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A. • Risk assessment example – inventory ICFR risk graph Moderate ICFR Risk High ICFR Risk More evidence required V C E P R Low ICFR Risk Low Medium High Low Medium High Misstatement Risk of Financial Reporting Element Risk of Control Failure Controls that address the Financial statement assertions C – Completeness E – Existence RO – Rights and obligations V – Valuation PD – Presentation and Disclosure ICFR – Internal Control over Financial Reporting Source: KPMG 2007 © 2007 KPMG LLP, a U.S. limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved. Printed in the U.S.A.© 2007 KPMG LLP, a U....
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This note was uploaded on 01/20/2011 for the course ACC 603 taught by Professor Robertj.ramsay during the Spring '10 term at Kentucky.

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AS5_Lorman_CAS 16-23 - © 2007 KPMG LLP a U.S limited liability partnership and a member firm of the KPMG network of independent member firms

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