What is IPE in audit?
- physical examination. inspection or count or tangible assets.
- confirmation. receipt of written or oral repsonse from independent 3rd party, verifying accuracy of info requested by auditor.
- inspection (documentation)
- recalculation.
- client inquiries.
- re-performance.
- analytical procedures.
- observation.
What does IPE stand for audit?
What is IPE in audit?
- physical examination. inspection or count or tangible assets.
- confirmation. receipt of written or oral repsonse from independent 3rd party, verifying accuracy of info requested by auditor.
- inspection (documentation)
- recalculation.
- client inquiries.
- re-performance.
- analytical procedures.
- observation.
What is the process of preparing an audit?
The following would be typical steps taken:
- Gain understanding of existing procedures through observation, by discussions with staff, or review of documentation
- Identify existing internal and accounting controls applicable to the area being audited
- Establish the scope of the audit based on information obtained and risk assessment
- Review applicable policies and/or procedures
What does IPE mean?
These may include:
- Report category (standard, custom or ad-hoc)
- Control number supported (how data maps to key controls)
- Data source (a specific system, application or database)
- System/tool generating IPE
- Report owner
- Report custodian
- Last change date
What is the difference between pre audit and Post Audit?
The AAFP advocates that pre-payment and post-payment audits should be infrequent, highly selective, supported by analysis showing definite abuse of the code in question, and demonstrate clear reasoning why the problem is not remediable by less onerous mechanisms.
What is an IPE in SOX?
Information produced by the entity (IPE) is any information that is produced internally by the company being audited and provided as audit evidence, whether for use in the execution of internal controls or for substantive audit procedures performed by an external auditor.
What is the difference between IPE and PBC?
PBC usually refers to requests made to the client by the external or internal auditors (for example you would request population file, support for testing, support for walkthrough etc). IPE is a general term for information produced by entity meaning anything that the client creates.
What are the IPE risks?
When assessing IPE, pertinent risks to be addressed include:Data processed by the application (source data where IPE is produced) is not complete or accurate.Data extracted from the application (defined parameters or range to execute and obtain IPE results) is not complete or accurate.More items...•
What is IPE and IUC?
Information “Produced or Provided” by the Entity (IPE) is evidence for the audit that is generated by the entity and used by the auditors to test a control. Information Used by the “Company or Entity” (IUC) is evidence that is used by the Company/Entity, in order to perform or execute their internal controls.
Why do we test IPE?
IPE is any information that is produced internally by a company being audited and provided as audit evidence, whether for use in the execution of internal controls or for substantive audit procedures performed by an external auditor.
Is bank statement an IPE?
IPE used in the performance of controls is, by definition, internal information. Therefore, external information used as audit evidence (e.g., bank statements, industry pricing data and other sources of information used in the performance of controls) is not subject to the requirements of paragraph 9 of CAS 500.
How do we test IPE?
developing your IPE testing approach:Create an IPE inventory per Category. By creating a listing of all SOX relevant IPEs that support key controls, you will have visibility over the full scope of IPE testing required. ... Categorise your IPE. ... Determine your testing approach. ... Maintain your IPE process.
What is IPE source data?
– Source Data: The information from which the IPE is created. This may include data maintained in the IT system (e.g., within an application system or database) or external to the system (e.g., data maintained in an Excel spreadsheet or manually maintained), which may or may not be subject to general IT controls.
What is a PBC accounting?
The acronym PBC is short for "provided by client" or "prepared by client." Sometimes the terms "client request list", "information request list" (IRL), "PBC checklist", or "outstanding list" are used interchangeably; however, the accounting profession seems to use PBC Request List most often.
What is SOX compliance?
A SOX compliance audit is a mandated yearly assessment of how well your company is managing its internal controls and the results are made available to shareholders. The primary purpose of a SOX compliance audit is to verify the company's financial statements, however, cybersecurity is increasingly important.
What are key reports in audit?
The financial auditor might use a key report from the information system (i.e., computer) as the key information or an important audit procedure. In this case, the reliance upon the information is critical to the conclusions about the assertion of the account balance, class of transactions or disclosure being tested.
What is SOX key control?
A SOX control is a rule that prevents and detects errors within a process cycle of financial reporting. These controls fall under the Sarbanes-Oxley Act of 2002 (SOX). SOX is a U.S. federal law requiring all public companies doing business in the United States to comply with the regulation.
What are IPE and IUC?
In order to understand if the SOC reports are addressing IPE and IUC, let’s start with what these terms mean:
What are Relevant Controls?
Relevant controls are the necessary controls to meet the examination objectives and requirements. Some practitioners refer to relevant controls as “key” controls. An entity may have hundreds of controls.
Evidence of Completeness and Accuracy in Compliance Reports
To fully understand and test relevant controls during a compliance report examination, it is important that practitioners don’t get caught in a slippery slope of over-scoping and over-testing the IUC and IPE.
What is the objective of an auditor?
.03 The objective of the auditor is to plan and perform the audit to obtain appropriate audit evidence that is sufficient to support the opinion expressed in the auditor's report. 1
Why do auditors select specific items?
The auditor may decide to select specific items within a population because they are important to accomplishing the objective of the audit procedure or exhibit some other characteristic, e.g., items that are suspicious, unusual, or particularly risk-prone or items that have a history of error.
What is audit sampling?
.28 Audit sampling is the application of an audit procedure to less than 100 percent of the items within an account balance or class of transactions for the purpose of evaluating some characteristic of the balance or class. 13
What is the purpose of a 29 audit?
.29 If audit evidence obtained from one source is inconsistent with that obtained from another, or if the auditor has doubts about the reliability of information to be used as audit evidence, the auditor should perform the audit procedures necessary to resolve the matter and should determine the effect, if any, on other aspects of the audit.
What is the alternative means of selecting items for testing?
The alternative means of selecting items for testing are: Selecting all items; Selecting specific items; and. Audit sampling.
What is observation in audit?
.16 Observation consists of looking at a process or procedure being performed by others, e.g., the auditor's observation of inventory counting by the company's personnel or the performance of control activities. Observation can provide audit evidence about the performance of a process or procedure, but the evidence is limited to the point in time at which the observation takes place and also is limited by the fact that the act of being observed may affect how the process or procedure is performed. 8
What is the relevance of audit evidence?
.07 Relevance. The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested. The relevance of audit evidence depends on:
