•• The auditor should bring to the attention of the management all the weaknesses he has identified and discuss with them the possible remedies and corrective measures immediately.
•• The auditor should consider changing his audit approach by increasing the level of detailed substantive testing. This is because the weaknesses imply that the system is not operating as designed and therefore cannot be relied upon.
•• The auditor should increase the sample size i.e. test as many entries as is considered necessary to avoid any error or fraud undetected.
•• The auditor should record significant weakness in the management letter and give his recommendations to management on how the weaknesses can be corrected.
•• If the internal control system is extremely weak such that he cannot depend upon it to apply any test, then he should qualify his report or at best give a disclaimer opinion.
Wilfykil answered the question on April 11, 2019 at 12:11
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