SSAE 15 - Reporting of Integrated Audits

SSAE Guide > SSAE 15

SSAE 15 was released to address the topic of examining an entity’s internal control over financial reporting when performing an audit of internal controls integrated with an audit of its financial statements. This Statements on Standards for Attestation Engagements was create to apply to reports in and after December 2008. The guidelines within this statement provide guidance for how to approach the subject of verifying that management’s position on how well internal controls were working.

As management says (management’s assertion) is usually that internal controls were designed properly, and operating effectively, the auditor must test to verify this statement. The best possible outcome for the company in SSAE 15 is that the auditor agrees, however there are varying levels in which the internal control at the company could be dysfunctional as shown below:

Definitions
Deficiency - When a flaw in the design or implementation of the control prevents the company from identifying material accounting misstatements
Significant Deficiency - One or more deficiencies that exist that may not indicate a material misstatement but are serious enough to bring to the attention of management
Material Weakness - This exists when one or more deficiencies are present to the extent that it is likely the organization would not prevent or detect a material misstatement in the financial statements

The auditor will then, after taking into considerations made during testing of the internal controls, express the opinion that controls were designed and operating effectively, or state the situations in which they were not.

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