Auditing and Assurance Services 1st Edition by Iris Stuart

Exercise 3

Management's report on internal controls. Refer to Management's Report on Internal Control over Financial Reporting in Exhibit 3-7 for Goodyear Tire Rubber Co.
a. Describe the steps taken by management to assess the company's internal controls.
b. Can you tell what framework management used to assess internal controls Explain.
c. Management has listed two material weaknesses in its report. Are these weaknesses "deficiencies in design" or "deficiencies in operation" of internal controls Do the internal control deficiencies involve preventive or detective controls
d. Management has identified segregation of duties as a material weakness. What are the two departments where segregation of duties was important
e. Explain the evidence the auditor gathered to review management's assessment of internal controls over financial reporting.
f. Review the opinion issued by the auditor regarding management's assessment in Exhibit 3-8 , "Excerpt from the Auditor's Report" for Goodyear Tire Rubber Company. What type of report did the auditor issue on management's assessment of internal controls Explain why.