Event Description

In this hands-on game, participants are helping to prepare an internal control testing plan for Home D‚cor & More (HDM). They must assess controls related to HDM’s inventory cycle to determine which financial statement assertions each control satisfies, the quality of the control’s design, and whether there is adequate segregation of duties. Then, they will complete the HDM control testing plan, including the level of reliance to place on each control and the test of control methods. Each participant wants to be spot-on with the evaluation before submitting the information to a manager for feedback.

Designed For

Accounting and financial service professionals needing a refresher on internal control testing plans and related standards

Objectives

Explain the professional standards related to and rationale for understanding and testing internal controls   Discuss the professional standards related to testing controls for operating effectiveness   Illustrate the appropriate level of linkage between the work performed in testing internal controls, control reliance and reporting on internal controls   Identify impact of a control reliance strategy on the detailed audit plan

Major Subjects

Refresher on understanding internal controls  When testing internal controls is required  When testing of internal controls is an effective strategy to reduce substantive testing   Designing tests of controls   Responses when deviations are discovered in the design or operating effectiveness of internal control 

Prerequisites

None

Instructions

None