Question
Case Study: Sarbox Scooter, Inc. - Case 5.6 of Auditing Cases , p. 242 Read the following Case: Scenario: You are an internal audit consultant
Case Study: Sarbox Scooter, Inc. - Case 5.6 of Auditing Cases, p. 242
Read the following Case:
Scenario:
You are an internal audit consultant are gearing up to work with Delmoss Watergrant LLP, the external audit firm on the annual audit. You have been charged to assist the management in preparing for the audit of internal control to be done by the external audit firm as required by SOX. You know that management must identify significant accounts and locations for testing its internal controls. Management must provide Delmoss auditors with documentation of its risk assessment and operating effectiveness of controls for each of the components of internal control that relate to relevant assertions in the financial statements. In a memo identify the identity-level controls that Delmoss will likely audit. Also, to negate the comments from one senior-level Sarbox Scooter, Inc. manager, you should state why SOX requires that external auditors evaluate and test internal audit controls.Present a case that external auditors are required to perform that evaluation especially in the post-SOX environment; it is also what Sarbox Scooter is paying for in its annual audit fee. Also, for this senior-level manager, diplomatically explain how SOX came about and is now in force since 2002.
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