Subsequent procedures 364

  • We are a 12/31 year end, and have run into what I’m hoping is not uncommon. Several of our ‘key controls’ were not successfully tested during 2004, and we are unable to pull data from 2004 in order to test in now (in 2005). Since our assertion date is 12/31, we are being told by our external auditors that we have to document these missing controls tests as ‘deficiencies,’ but I’m asserting that since they weren’t tested, we don’t have to document the testing (or lack thereof) at all.
    Has anyone else had to deal with this type of issue?

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  • The auditor is not saying that your testing is deficient, they are saying that your system of internal control is deficient - because you are unable to DEMONSTRATE that it is functioning. This is what they want you to report.

  • Let me ask a question: How will you assure/show that a key control, running only once a year, say at the year end, is effectiv if you can’t test it in the following january. You somewhat need to get your data over to the following year in order to do so. Otherwise you will encounter the problem adressed every single year.

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