[Relevant Assertion Level] Test of Control 에서 해도 되는 것

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What is TEST OF CONTROL?

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■ Test of Control =Testing Controls = To test the effectiveness(not efficiency) of controls

 

:Which means = observation, inquiry, inspection, recalcualtion, reperformanc of a control.

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■ Test of Controls are furter audit procedures.

 

Tests of controls are designed to evaluate the operating effectiveness of controls.

 

-Thus, they are further audit procedures.

 

-Further audit procedures are responses at the relevant assertion level.

 

It is not risk assessment procedure. 

-It's objective is not achieved when obtaining the understanding. 

 

↔ 반면에, Analytical procedures are applied as risk assessment procedures to obtain an understanding of the entity and its environment, including its internal control. They also may identify unusual transactions and events, and amounts, ratios, and trends with financial statement and audit planning implications. 

 

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■ RMM이 적당할때 Test of Control을 해야 한다. 

 

????The extent of tests of controls is determined prior to assessing RMMs.

 

그러면, 적당한 RMM이란 무엇일까?

https://efforty.tistory.com/23?category=739567

When does the sample support the RMM?

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■  Auditor가 관심있는 것은 External Financial Reporting이다. 

 

따라서 Product Line 관리 같은 Internal Management Purpose로는 Test of Control을 잘 안하려 한다.

 

 

 

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■ The auditor가 test of control로 찾아내는 것은?

 

○ To obtain assurance that necessary controls are operating effectively at the assertion level.

 

○ Deviations from specific controls을 찾아낸다. 

 

- 근데 이게 전부다(necessarily) Error in the records 로 이어지는 것은 아니다. 

 

- 즉, The rate of deviations from specific control > The rate of error in the accounting records.

 

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■ What Test of Control Includes

 

When automated controls leave no visible evidence (no visible audit trail), tests include

 

(1) reviewing transactions submitted for processing and comparing the expected results with the related output to determine that unacceptable conditions were reported and properly resolved.

 

(2)The auditor may need to audit through the computer to accomplish this purpose.

 

-The costs of obtaining the program tend to be very high.

-Parallel simulation is a test of the controls in a client’s application program. An auditor-developed program, not the client’s program, is used to process actual client data and compare the outputs and exceptions report with those of the client’s application program.

If the client’s programmed controls are operating effectively, the two sets of results should be reconcilable. 

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Test of control을 업그레이드 하는 방법

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■ Test of Control이 잘 작동하는지 부터 알아봐야 하는데, 그러기 위해서는,

Evidence about effectiveness of operation을 당연히 찾아봐야 겠다.

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Documentation 이 답이다.

 

근데 그게 여의치 않을 때(예를 들어 Computer Controls같은 경우)에는, 

 

Observation 이나 Inquiry and other procedures 가 적절한 방법이 될 수 있다.