Internal Control
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GAO-03-673G Government Auditing Standards > Chapter 6 General, Field Work, and Reporting Standards for Attestation Engagements > Internal Control
6.13 The standard related to internal control for examination-level attestation engagements performed in accordance with GAGAS is:
In planning examination-level attestation engagements, auditors should obtain a sufficient understanding of internal control that is material to the subject matter or assertion to plan the engagement and design procedures to achieve the objectives of the attestation engagement.
6.14 In planning an examination-level attestation engagement, auditors should obtain an understanding of internal control 1 as it relates to the subject matter or assertion to which the auditors are attesting. The subject matter or assertion may be of a financial or nonfinancial nature, and internal control material to the subject matter or assertion the auditor is testing may relate to
a. effectiveness and efficiency of operations, including the use of an entity’s resources;
b. reliability of financial reporting, including reports on budget execution and other reports for internal and external use;
c. compliance with applicable laws and regulations, provisions of contract, or grant agreements; and
1Although not applicable to attestation engagements, the AICPA SASs may provide useful guidance related to internal control for auditors performing attestation engagements in accordance with GAGAS. In addition, auditors performing attestation engagements may wish to refer to the internal control guidance published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington, D.C.: Nov. 1999), which incorporates the relevant guidance developed by COSO, provides definitions and fundamental concepts pertaining to internal control at the federal level and may be useful to auditors at any level of government. The related Internal Control Management and Evaluation Tool, GAO-01-1008G (Washington, D.C.: Aug. 2001) based on the federal internal control standards, provides a systematic, organized, and structured approach to assessing internal control.
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