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Integrated Audit Simulator

Master the procedures for an audit of internal control over financial reporting (ICFR).

Phase 1: Planning the Engagement

In an integrated audit, the auditor must plan to achieve the objectives of both the financial statement audit and the audit of ICFR. This involves understanding the entity, assessing risk, and considering how to use the work of others.

Management's Role

Management must accept responsibility for ICFR, evaluate its effectiveness, and provide a written assessment.

Auditor's Objective

Express an opinion on the effectiveness of the entity's ICFR as of a specific date (the balance sheet date).

Key Consideration

The same materiality level and risk assessment process are used for both audits. The fraud risk assessment is critical.

Phase 2: The Top-Down Approach

Auditors use a top-down approach to select which controls to test. Click through the steps to see how the focus narrows from the big picture to individual controls.

Phase 3: Testing Controls

For each selected control, the auditor must test its design and operating effectiveness. Choose the primary audit procedure for each scenario.

Phase 4: Evaluating Deficiencies

When a control fails, the auditor must classify the severity of the deficiency. Drag each scenario to the correct category.

Scenarios

Material Weakness

Significant Deficiency

Control Deficiency