Is rollforward testing required? 2752

  • if interim testing is completed within 30 days of yearend? I’ve always thought rollforward testing is required only if the interim test date is over 60 days before yearend. Is it not true? I read AS2 and AS5 and couldn’t seem to find the answer. Thanks in advance.

  • AS2 and AS5 only apply to auditors. If you are talking about the internal process used to inform management’s assessment then you do not necessarily need to do rollforward testing.

  • Yes, I understand. I’m trying to see what the external auditors are required to do. Basically they completed the ‘interim’ testing within 2 weeks of year end and now they are saying they want to inquiry each and every controls to make sure they haven’t changed (over the 2 weeks). It seems excessive?

  • That appears excessive to me.
    This close to the year-end they should just need assurance that nothing has happened to change their assessment at interim, this doesn’t mean retest all the controls but that they should just need confirmation that nothing has changed in the process, no incidents have occurred in the roll forward period, etc.
    i would push them on this.

  • While they may have completed their interim testing within 2 weeks of year end, that does not mean that the test samples were all that close to year end. Check with them to see what period of time their testing covered. They may have only covered through your third quarter and need to gain coverage over Q4 activity.
    It sounds like you need to open up the lines of communication with your auditors to better understand their approach to testing. The better you understand it, the more you can do to make it easier for them to rely on your internal testing work and possibly reduce audit fees.

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