Internal Controls Over Financial Reporting
3.7 (58 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
2,876 students enrolled

Internal Controls Over Financial Reporting

Internal Auditing: Part 1 of 3
3.7 (58 ratings)
Course Ratings are calculated from individual students’ ratings and a variety of other signals, like age of rating and reliability, to ensure that they reflect course quality fairly and accurately.
2,876 students enrolled
Created by S. Nicole Green
Last updated 8/2019
Current price: $13.99 Original price: $19.99 Discount: 30% off
5 hours left at this price!
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This course includes
  • 1 hour on-demand video
  • 7 downloadable resources
  • 1 Practice Test
  • Full lifetime access
  • Access on mobile and TV
  • Certificate of Completion
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What you'll learn
  • Perform an actual internal audit engagement for internal controls over financial reporting
  • Learn key internal audit terminology and concepts.
  • Use real templates to practice what you learn.
  • Stay SOX compliant.
  • Beginner Level.
  • No prerequisites.

This course is designed for you to learn key concepts and put them immediately into practice. This course will be constantly evolving with real-life audit scenarios and audit templates being added routinely to the Resources tab in the course Dashboard. The goal is to help you perform audits for your business; or to assist you in learning internal auditing for your educational programs or Certified Internal Auditing (CIA) certification; or to boost your resume/CV by adding a new and in-demand skill.

Who this course is for:
  • Accounting and audit students
  • Small business owners
  • Employees looking to add new skills to their resumes/CV
  • Anyone interested in auditing
  • Internal auditors performing SOX audits.
Course content
Expand 18 lectures 45:48
+ Introduction
18 lectures 45:48

Welcome to the first course in the Internal Auditing series! This first part is designed to help you perform internal control audits over financial reporting. These types of audits are usually integrated with financial statement audits. This class is designed for beginners. We will learn terminology and have mini-quizzes along the way to retain the content. Also, we will put into practice what we learn with an audit scenario at the end of the course.

Preview 01:20

There are many important terms in the world of internal auditing; however, I will focus on the a few of the most important and widely-used terms that you will hear throughout the course or in real-life when performing internal audits.

Preview 03:09

Audits involve examining and analyzing evidence and then reporting on their findings. This is true of both large and small businesses. This lesson will help familiarize you with key concepts in audit, which will enable you to begin performing internal audits at your organization.

Preview 04:46

What are audit frameworks and standards? How are they used? In this lesson, I will explain them both and how they are related and why they are important.

Preview 02:01

The audit process is similar for most engagements and normally consists of four stages: Planning, Fieldwork, Reporting, and Follow-up/Post-Audit Review.

Audit Engagement Process

Audit evidence is evidence obtained during an audit (usually in the Fieldwork phase) and recorded in the audit working paper documentation. Audit working paper documentation includes, for example, audit programs, analyses, issues memoranda, summaries of significant findings or issues, letters of confirmation and representation, checklists, abstracts or copies of important documents, correspondence (including e-mail) concerning significant findings or issues, and schedules of the work the auditor performed.

Audit Evidence

Audit objectives are broad statements developed by auditors and define intended audit goals. Understanding audit objectives will be important in the Planning phase when developing the audit work plan for Fieldwork testing.

Audit Objectives

In the Planning phase, the auditor plans the scope (time period covered) of the audit; determines the audit objective; understands what documentation should be examined; collects documents from previous audits; sends questionnaires or surveys to the auditees (i.e. business unit being audited) for background information about the audit subject (i.e. process owners, users, customers, activity details, flowcharts, policies used, etc.)

Planning Phase

The Memorandum of Discussion is used to document all communications throughout the course of the audit. This document will then become an audit working paper that you can use as evidence to support audit conclusions and should be retained in the audit project folder or audit working paper software.

Memo of Discussion Template

Risks are the events that prevent organizations from meeting their goals. Identifying risks will lead you to the activities (controls) that you will need to examine in the Fieldwork phase to see whether they are working properly to prevent the risk. This template will walk you through the risk assessment process for your audit.

Risk and Control Template

The purpose of this lecture is to identify and document the specific controls that will be examined during the Fieldwork phase. Effective controls reduce the risk of asset loss and help ensure that plan information is complete and accurate, financial statements are reliable, and that the plan complies with laws and regulations.

Internal Control Template

The audit work plan (also called the Audit program) are lists of audit procedures to be performed by auditors to obtain sufficient, appropriate evidence. The individual procedures are determined after obtaining an understanding of the organization, the financial reporting processes, and determining the audit strategy.

Audit Work Plan Template

The Fieldwork phase is where evidence is gathered according to the detailed procedures in Audit Work Plan developed during the Planning phase. 

Fieldwork Phase

The auditor's objective in an audit of internal control over financial reporting is to express an opinion on the effectiveness of the company's internal control over financial reporting. The purpose of the internal controls audit over financial reporting is to understand whether any events present a reasonable possibility of material misstatement to the financial statements.

Fieldwork Testing: Financial Statements

The report states the audit objective(s), the audit tests performed, the results of the audit tests, and recommendations for improvement. The recommendations should be based on audit conclusions that are supported by audit evidence.

Reporting Phase

In the Audit Scenario, we will draft an audit finding. Audit findings are results of the audit examinations performed. Understanding how to properly draft audit findings will lead to better audit reports.

Audit Scenario

Internal Audit should follow-up on all audit findings that were reported. Post-audit follow-up also allow auditors to provide positive feedback and learn valuable lessons to improve their own processes.

Post-Audit/Follow-Up Phase

You made it to the end! Thank you for taking this course! I hope that you gained some valuable insights into internal audit and how it can benefit your organization. If you are a student, I hope that this helped you with your exams or to better understand some key audit concepts.

Closing Remarks

This is a final exam that will attempt to force you to apply the knowledge you learned in this course to more complex questions.

Final Exam
5 questions