On April 3, 2017
In my last blog, “The Knowledge Gap,” I discussed technical preparation and the usefulness of scenario flowcharts. A great way to help you get prepared for Capstone 1 and the review of your technical is therefore to understand how scenarios can trigger you to flow your response. Since the case requires you to do something, you should understand what the scenario is expecting you to discuss. Don’t worry, there are common testing streams in each of the six technical competency areas, so you will get comfortable with what the expectations are with practice.
Here’s an example of a flowchart for a controls scenario, one of the most commonly tested areas under Audit and Assurance:
1. Understand the required
· Looking for good controls to test or bad controls to fix
2. Use critical reading skills to find relevant issues
· Watch for obvious segregation of areas in case (headings)
· Consider automated vs. manual
3. Analyze to develop depth – 3-part response
· Bad controls to fix
o Weakness – identify using case facts
o Implication – explain impact of weakness on organization
o Recommendation – specific steps to fix the weakness (must make sense based on size/nature of organization)
· Good controls to test
o Control – identify using case facts
o Implication – explain why effective control
o Procedure – specific steps to test control (not a typical substantive audit procedure)
4. Other considerations
· Need breadth – address enough (concise but complete thoughts)
· Is there an overall problem that’s causing the other weaknesses (e.g., overall lack of segregation of duties, overall lack of management/owner oversight)?
· Possible integration – overall audit approach (control environment)
As you can see, there’s a way to write that type of required to get the depth you need. This testing stream is very process driven. Once you understand the process, it is a matter of rolling through the case facts to see what direction the scenario is taking you for the controls in that particular case. The more common scenario is to see weak controls, but you want to be prepared for any control discussion.
Again, it is not about memorizing a framework that you apply fully every time. It is about understanding that because the required asked you to look at controls, these are the repetitive themes that may apply within the case facts. Some will apply, some won’t. You must be specific to the case you are addressing.
As part of our 2017 CFE Prep course, we will be showing you the most common scenarios flowcharts to use in your CFE preparation.