White Paper for Members in Business and Industry Guide to Understanding Internal Control and Internal Control Services for Smaller Entities

The AICPA recently issued a white paper on understanding internal control and internal control services directed to members in business and industry. The concept of internal control services is part of SSARS No. 19.

While practitioners must understand the concepts of internal control and internal control services, so must members in business and industry, including audit committees and managers. It’s important for these members to understand the concepts of internal control and independence and the effect they have on the CPA practitioners they hire to audit, review, or compile their financial statements, as well as perform internal control services.

While practitioners understand that if a CPA practitioner has established or maintained internal controls, including performing ongoing monitoring activities for a client, the CPA’s independence has been impaired and thus he or she is precluded from performing an audit or review engagement for that client. The client may not understand such limitations. The white paper addresses these issues.


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