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10 - DESHUN CONDELL AUDITING 1(10-22 10-23 10-28 11-22...

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DE’SHUN CONDELL AUDITING 1 (10-22, 10-23, 10-28, 11-22) 11/22/11 10-22 A serious weakness in the company’s internal controls was the inadequate segregation of accounting duties. James was given the combined duties of custody of assets and accounting for those very same assets. 10-23 Maier is correct in her belief that internal controls commonly do not function in the manner they should. She discounts the value of beginning the understanding of internal control process by preparing or reviewing an estimated flowchart of internal controls. Gaining an early understanding of the client's internal control will provide Maier with a basis upon which to make a decision about the number and extent of further audit procedures and sample sizes based on assessed control risk. By not obtaining this initial and essential understanding of internal control until later in the engagement, Maier risks performing either unnecessary o insufficient work, or emphasizing the wrong areas during her audit.
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