Does anybody know what a Walkthrough is? 1628



  • I have been asked the following questions ;

    1. What are the SOX disciplines surrounding the walkthrough process?
    2. What is it particular that makes a walkthrough a success?
    3. When should a walkthrough take place?
      Any help would be much appreciated


  • Hi and welcome to the forums 🙂 I’m more of an IT person and will share in that context as it’s a familiar term. In general terms a walkthrough is a special review process to share information with the approver. In the 1970’s when I started in IT, ‘Structured Walkthroughs’ were used to share designs or review program code with your manager, a team member, etc.

    1. What are the SOX disciplines surrounding the walkthrough process?
      Some links might be found here related to SOX Walkthroughs
      Please paste into your browser and add ‘www’
      google.com/search?hl=en-and-q=sox walkthrough
      QUOTE: Audit walkthroughs are an important SOX 404 compliance activity. It is an activity performed only by auditors, both internal and external. For internal auditors, a walkthrough is optional (though very common), one of many ways to collect evidence for management to confirm that the design of the internal controls over financial statements is adequate. For external auditors, a walkthrough is mandatory. It is one of the activities required before an attestation on the internal controls over financial statements can be issued by the audit firm.
    2. What is it particular that makes a walkthrough a success?
      Planning and preparation are essential. Also, an open dialogue between the participants is important, which might be difficult between audit and business/IT professionals 😉 The auditor should ensure the participant that they to learn the process, so that folks relax and are willing to share information without fear that it might be used against them in an audit report.
    3. When should a walkthrough take place?
      When there is a need to review complex processes that aren’t easily explained in writing. It provides a means of achieving a ‘level set’ between the two parties (reviewer and subject matter expert).


    1. What are the SOX disciplines surrounding the walkthrough process?
      For SOX purposes, an auditor may observe activities and inspect accounting documents and records to obtain an understanding about the design of controls and if they have been placed in operation.
      The understanding can be obtained by performing a transaction walk-through. This process involves selecting the appropriate documents for the initiation of a transaction type and tracing them through the entire accounting process.
      It should be noted that a walk-through is not considered to be a test procedure. It should also not be confused with re-performance. Re-performance IS a test procedure and can be effectively used to test the operating effectiveness of a control. Thus, a walk-through is generally performed during the planning or documentation phase of a SOX compliance initiative. It is not conducted during the testing phase or assessment phase.
      During each stage of the processing steps identified from a walk-through, the auditor may make inquiries, observe personnel activities, and/or inspect completed documentation for the transactions selected.
      As it relates to Audit Standard No. 2 from the PCAOB, the standard includes a requirement that the auditor must perform a walkthrough for each of the company’s significant processes.
      in Standard No. 2, the scope of transactions for which the auditor is required to perform a walkthrough as noted in Standard No. 2 requires a walkthrough for major classes of transactions.
    2. What is it particular that makes a walkthrough a success?
      When performing a walk-through, the conceptual framework for evaluating the nature of controls focuses on the competence and objectivity of the person who performs it. Thus, it might be concluded that a successful walk-through is one that can be relied upon for the information gained by performing it. However, it should also be noted that an auditor must separately perform his/her own walk-through when opining on the FS. In short, if the objective of the walk-through is to obtain an understanding of the process or key controls involved, a successful walk-through effectively identifies the critical steps in the process and/or the controls having pervasive inflience on financial reporting.
    3. When should a walkthrough take place?
      As noted in the reply to question #1, a walkthrough generally is performed during the planning or documentation phase when in connection with SOX compliance efforts.
      Hope this further helps,
      Milan


  • Thank you Harry and Milan. Information Much Appreciated.


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