A Guide for Evaluating Internal Control Deficiencies
20 June 2022
Orignal content provided by BDO US.
Management is responsible for maintaining a system of internal control over financial reporting (ICFR) that provides reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with the applicable accounting principles framework. Management of insurance companies and Abu Dhabi government owned companies and departments in the UAE are required to obtain an independent auditor's opinion of the effectiveness of internal controls over financial reporting. In supporting its assessment, management is responsible for maintaining evidential matter, including documentation.
Our Management Mini Guide for Evaluating Control Deficiencies was developed to assist management in evaluating identified control deficiencies individually and in the aggregate. The guide will assist management through the process, including:
- Identification of the deficiency
- Considerations over the magnitude and likelihood of a potential misstatement
- Identification of compensating controls
- Assessment of deficiencies for potential aggregation
- Conclusions on the severity of the deficiency
- Documentation of conclusions and reporting considerations
Additionally, this guide includes important reminders related to the remediation of identified control deficiencies.