Overview
Under AU-C 315.14, auditors are required to evaluate the design of their client’s controls and determine whether they have been implemented. However, data gathered by the AICPA Peer Review Program indicates that many auditors are not meeting this requirement. In fact, noncompliance with paragraph .14 is nearly twice as common as non-compliance with any other requirement of AU-C 315.
One cause of this non-conformity is the misconception that smaller audit clients have no controls, and therefore paragraph .14 does