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Essay / Research Paper Abstract
This 4-page paper provides a sample memo concerning auditing statements SAS 112 and 115. Bibliography lists 1 source.
Page Count:
4 pages (~225 words per page)
File: AS43_MTfasamemo.rtf
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small accounting firm to other accountants regarding SAS 112, which concerns the communication of internal control deficiencies. The purpose of the memo is to explain the rule and how it
would impact other auditors. Following is a sample of such a memo. TO: Auditors, ABC Accounting Firm FROM: A. Student RE: SAS 112 - Communicating Internal Control Related Matters Identified in an
Audit Ever since the early 2000s, when various companies were exposed for lax accounting procedures (which led, in some cases, to corporate
implosions, bankruptcies and huge losses for stakeholders), more focus has been directed toward internal controls as it pertains to financial statements. It seems there has been some confusion between SAS
112 and its successor, SAS 115, which amends and replaces SAS 112 as of periods ending after December 2009 (Ryan, 2008). Incidentally, both SAS 112 and SAS 115 conform with
policies introduced in PCAOB Auditing Standard No. 5 which, in turn, went into effect for audits of fiscal years ending on, or after, November 15, 2007 (Ryan, 2009).
But lets take these two auditing standards separately. SAS 112 was put into place to help auditing clients
take responsibility for their own mistakes and potential misstatements. Its understood here that not every company is an Enron or a Worldcom, and SAS 112 allows management to review and
re-examine potential misstatements, and reminds the clients that they are ultimately responsible for the internal control of their financial statements, and they, and they alone, must take the risks if
things are not in order. Auditors arent required to have in place methods that identify weaknesses in a clients internal control systems. But
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