Internal control issues have been at the forefront of the public's attention in recent years. In many instances, failures in internal controls have led to financial statement fraud; however, fraud can occur in a variety of ways. This comprehensive program provides an emphasis on both internal controls and fraud in financial statement audits, single audits and some attestation engagements. This program reviews internal controls and fraud specifically as they relate to SAS No. 99, the 2003 Yellow Book, and the recodification of the SSAEs.

Use of Materials

Audio or DVD
The user should begin by watching the DVD segment or listening to the audio CD for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. It may be helpful to highlight important material and/or to make additional notes. Next, the user should complete the study questions at the end of the chapter and review the answers. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the DVD or listening to the audio CDs and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or DVD or audio CDs that were difficult. When the user is ready, s/he should complete the quizzer. Reviewing notes periodically will increase retention of the material.

Online
The user should begin by watching the streamed video segment, if any, or listening to the streamed audio segment, if any, for the chapter before reading the text. The user may wish to make notes of the most important concepts and any terms that are new. Next, the user should review the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. After the user has studied each chapter, s/he should click on the link at the left to complete the interactive study questions. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished watching the streamed video, if any, or listening to the streamed audio, if any, and reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text or video/audio, if any, that were difficult. When the user is ready, s/he should click on the link to the left to complete the quizzer. The user's CPE certificate will be provided immediately upon successful completion of the quizzer.

Software
The user should begin by reviewing the learning objectives at the beginning of the chapter and read the chapter. The user should work through each of the examples. As the user studies each chapter, s/he should complete the interactive study questions that appear in the lower panel of the screen. If the user answers a study question incorrectly, s/he should review the section of the text that is indicated at the end of the explanation to the study question to assure comprehension of the material. The user should review the learning objectives once more to consider achievement of the objectives. After the user has finished reading the text and working through the study questions, s/he may wish to review her/his notes and any sections of the text that were difficult. When the user is ready, s/he should click on the link at the far left to complete the quizzer. The user should email her/his quizzer statistics using the quizzer submission link in the software and the user's CPE certificate will be mailed to her/him.

Chapter 1 gives an overview of internal controls and fraud in government engagements.

Chapter 2 reviews techniques to identify fraud risks.

Chapter 3 evaluates the design of internal controls over financial reporting.

Chapter 4 discusses audit procedures related to risks of material misstatement of the financial statements.

Chapter 5 reviews the consideration of fraud in a Single Audit.

Chapter 6 evaluates the design of controls over compliance in a Single Audit.

Chapter 7 explains reporting on internal control and fraud.

Helpful Guidance

Throughout this program, the user will find explanations and discussions regarding some of the issues that often face practitioners. In order to enhance the user's comprehension of the material and highlight important practical considerations, this program includes the following designations:

A Biskpoint presents analysis or commentary that attempts to explain or clarify authoritative guidance.

A Bisktip provides practical advice that may be used to help improve client service or service to the practitioner's organization.

• Discuss the relationship between risk assessment procedures and the consideration of internal controls and fraud in a financial statement audit

• List the components of internal control

• Define fraudulent financial reporting and the conditions present when fraud occurs

• Discuss the auditor's required understanding of internal control

• Explain the procedures that should be applied to identify the risks of fraud

• Identify fraud risks that may result in material misstatement of the financial statements

• Evaluate the audit evidence

• List the required documentation of the consideration of fraud

• List the risk assessment procedures used to evaluate the design and implementation of internal controls over financial reporting

• Identify the manual and automated controls that should be evaluated and how to evaluate them

• Discuss when to use specialists in evaluating internal controls over financial reporting

• Discuss the effects of internal control and fraud risk assessments on the risk of material misstatement of the financial statements

• Develop overall and specific responses to identified risks

• Assess control risk and develop further audit procedures

• List the characteristics of fraud related to federal program compliance

• Discuss the auditor's responsibility in a Single Audit for assessing the risk of fraud due to noncompliance

• Discuss how to respond to the identified compliance fraud risks

• Discuss the definitions of and responsibilities over internal controls in a compliance audit

• Perform risk assessment procedures to obtain an understanding of internal control over compliance

• Apply the internal control components in a compliance audit

• Discuss the required depth of understanding of internal controls in a compliance audit, including the effect of service organizations

• Evaluate and report control deficiencies in a compliance audit

• Compare the definitions and reporting requirements under GAAS, GAGAS, and OMB Circular A-133

• Discuss the applicability of GAAS to GAGAS and OMB Circular A-133 compliance audits

Betty A. Pendergrass, CPA (KY), CGFM, is Director of Administration for the Kentucky Workers' Compensation Funding Commission. In her 25-year career in local government finance in Kentucky, she has served as Local Government Advisor Chief for the Kentucky Department for Local Government, chief financial officer in several Kentucky cities and audited local government entities from the public accounting sector. In addition to her financial management and auditing responsibilities, she has also provided training and technical assistance to local government officials and CPAs who audit governmental entities. Ms. Pendergrass has also developed training programs for governmental auditing and accounting continuing education and has authored a number of courses for Bisk Education, Inc. (Speaker)