Assess whether a control deficiency is significant or material (200c13)

Situation

External counsel's accounting expert in a construction contractor on percentage-of-completion has one working extract — ghost-employee payroll extract — after a Big 4 inquiry on cutoff testing. If ghost-employee payroll extract cannot support a control deficiency is, the honest Forensic Accounting output is hold.

Decision

External counsel's accounting expert in a construction contractor on percentage-of-completion must choose A control deficiency is significant / Material using ghost-employee payroll extract after a Big 4 inquiry on cutoff testing.

Hypotheses to test

• External counsel's accounting expert can defend A control deficiency is significant from ghost-employee payroll extract after a Big 4 inquiry on cutoff testing in a Forensic Accounting challenge.
• External counsel's accounting expert cannot defend A control deficiency is significant from ghost-employee payroll extract; Material is what the extract actually supports after a Big 4 inquiry on cutoff testing.
• A Big 4 inquiry on cutoff testing never reached the population in ghost-employee payroll extract — reopen intake, do not close a control deficiency is.
• Two facts in ghost-employee payroll extract after a Big 4 inquiry on cutoff testing conflict for external counsel's accounting expert; hold this Occupational Fraud file.

Analysis required

• Quantify the entry if external counsel's accounting expert has to reverse it.
• Separate a close-process miss from a qualitative SAB 99 issue in a construction contractor on percentage-of-completion.
• Reconstruct vendor, journal, or inventory lines in ghost-employee payroll extract through the window opened by a Big 4 inquiry on cutoff testing.
• For this Forensic Accounting Occupational Fraud file, read ghost-employee payroll extract against a Big 4 inquiry on cutoff testing and write the one fact that would move a control deficiency is for external counsel's accounting expert.

Recommendation

Choose A control deficiency is significant / Material on this Forensic Accounting / Occupational Fraud packet (ghost-employee payroll extract after a Big 4 inquiry on cutoff testing). The follow-on Occupational Fraud action is what external counsel's accounting expert does next: implement the option, assign an owner, and log the missing fact.