Reviewing results of testing

In this lesson

1. 0:00 Evaluating controls testing results
2. 0:45 Understanding deficiencies and anomalies
3. 2:00 Reporting significant deficiencies to management
4. 4:29 Explaining implications and recommendations
5. 6:06 Identifying and recommending controls in exams
6. 8:05 Presenting deficiencies in table format
7. 9:39 Oak Co purchasing system recommendations

About this lesson

This video walks you through the critical process of assessing whether controls are working effectively, distinguishing between one-off failures and systemic weaknesses, and understanding how your findings shape your audit approach and reporting obligations to management. The core skill here is interpreting control test results to decide your next steps. When controls don't perform as expected, you'll learn to classify failures as anomalies (one-off events requiring extra testing) or true deficiencies (indicating the control is ineffective and control risk must increase). True deficiencies mean you'll need to expand your substantive testing significantly, so getting this assessment right directly impacts your audit plan and workload. You'll also master the reporting requirement: communicating significant deficiencies to those charged with governance through a management letter or formal report. The video shows you how to structure this feedback as a three-part narrative—identifying the specific problem, explaining its implications (typically financial loss or operational inefficiency), and recommending practical controls to mitigate the risk. Using worked examples from a purchasing system scenario, you'll see how exam questions typically require you to identify deficiencies, explain why they matter, and suggest concrete control improvements to address them. This directly supports your Audit and Assurance studies and prepares you for exam questions requiring you to analyse control failures and propose solutions that demonstrate your understanding of effective internal control design.

Duration: 12m