Sarbanes-Oxley (SOX): Importance of Assessing Material Impact

Field: Auditing | Delivery Method: Self Study | CPE Hours: 2.0

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Per AS5, the auditor must evaluate the severity of each control deficiency to determine whether the deficiencies, individually or in combination, are material weaknesses. The trick is…..what parameters should be considered when determining materiality.

In planning and performing the audit, the auditor is not required to search for deficiencies that, individually or in combination, are less severe than a material weakness. There are several definitions of materiality utilized in the profession that are promulgated by the AICPA, PCAOB, COSO and others.
This session will cover several aspects about the concepts of material weakness and significant deficiency. We will evaluate recent cases of material weakness disclosures and updates from the PCAOB.
Lesson Objectives
  • COSO definitions of major deficiency
  • AU 325 Definitions
  • AS5 definitions
  • Assessing deficiency impact
  • Indicators of a material weakness
  • Example 1 & 2 – Reconciliations
  • Example 3 & 4 – Standard Sales Contract
  • Example 5 & 6 – Several Deficiencies
  • Examples of recent Material Weaknesses
  • Deficiency communication
  • Deficiency history and restatement study
    • Study on impact on earnings
  • August 2015 PCAOB update
  • PCAOB priorities

Field: Auditing
CPE: 2.0
Delivery Method: Self-Study
Format: Video




Your Instructor


Lynn Fountain
Lynn Fountain

Consultant, CPA, CGMA, CRMA, MBA, Past Chief Audit Executive

Business Consultant, Trainer, Author


Ms. Fountain has over 40 years of experience spanning public accounting, industry accounting and consulting. Sixteen years of that experience has been in the field of internal audit, risk managment and process improvement. She is well adept to assist your organization evaluate business strategy, perform risk assessments, establish a Sarbanes-Oxley process, synergizing internal audit processes or perform process improvement projects.


As a past corporate executive Lynn has a passion for working with professionals to enhance their processes and provide leading edge education. She has authored and delivered hundreds of training courses for accounting, finance and audit professionals. Her training is filled with not just theory but real world application.


Ms. Fountain has authored three technical publications:

-Leading the Internal Audit Function 

-Raise the Red Flag

-Ethics and the Internal Auditor's political dilemma


Lynn is a recognized leader in the internal audit profession as well as a recognized business professional.  


Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has active, current CPA, CGMA, and CRMA credentials.


https://www.lynnfountain.net/


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