M5 - Performing SOC Engagements

Study Notes

Addressing Risk Management Matrix (RMM) in an Audit

Maintain professional skepticism throughout the audit process.
Assign more experienced staff or specialists to handle complex RMM components.
Provide additional supervision to ensure thoroughness and quality control.
Introduce unpredictability in audit procedures to prevent patterns and ensure controls are tested effectively.
Modify the NET (Nature, Extent, Timing) of procedures as needed, based on the RMM assessment.

Nature, Extent, and Timing of Procedures (NET)

Nature: Involves inquiries, efficient item selection methods, and assessment of completeness and accuracy.
Extent: Depends on sample size, observation frequency, tolerable deviation rates, and expected deviation rates—all of which inform audit scope and effort.
Timing: Can occur at interim dates or at the end of the fiscal year – determined by audit scope and risk assessments.

SOC Subsequent Events

Auditors don't actively search for subsequent events. However, they must address events that are brought to their attention.
Evaluate whether undisclosed events could mislead report users.
May necessitate reporting modifications or report withdrawal.
Routine upgrades/maintenance do not typically require disclosure.

Subsequent Events - Notifications

Auditors must use professional judgment to ascertain whether and how to communicate subsequent events to report users.

Auditor Responsibility for Security Breaches

Inquire with management regarding controls in place to detect, report, and obtain evidence related to security breaches.

Description

This quiz explores key concepts in risk management matrices as they pertain to auditing. It covers professional skepticism, the nature, extent, and timing of audit procedures, and the importance of addressing subsequent events in the audit process. Test your understanding and application of these critical audit principles.