Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Why is an audit of internal control over financial reporting and audit of financial statements called an integrated audit?

The auditor may issue a joint opinion or issue two separate opinions. The same auditor is required by the Sarbanes-Oxley Act of 2002 to conduct both the audit of internal control and the audit of the client’s financial statements. Thus, this approach is called an integrated audit.

Is internal audit part of internal control?

An internal audit is a check that is conducted at specific times, whereas Internal Control is responsible for checks that are on-going to make sure operational efficiency and effectiveness are achieved through the control of risks.

How does internal control affect financial reporting?

Effective internal control reduces the risk of asset loss, and helps ensure that plan information is complete and accurate, financial statements are reliable, and the plan’s operations are conducted in accordance with the provisions of applicable laws and regulations.

What are the goals of conducting an audit of financial statements and internal controls?

The objective of an audit of internal controls is to ensure that future errors and potential fraud is prevented. An auditor’s opinion enhances the degree of confidence that intended users can place in the financial statements. Why do larger public companies require an audit on internal controls?

What is meant by integrated audit of control and financial statements?

An integrated audit considers the relationship between information technology, financial and operational controls in establishing an effective and efficient internal control environment.