Problem: Cohen and Single, LLP, are auditing the ICFR and financial statements of Copley and Sons, a public company that sells supplies to government agencies.Copley and Sons has a 12/31 fiscal year end. Cohen and Single conclude that the financial statements for the current and prior year are fairly stated. However, they found a material weakness in ICFR. There is a lack of separation of duties because the companys' CFO has the ability to change passwords on employee's computer identification numbers and has unlimited access to a computer terminal through which any journal entry can be entered without approval and review.Management's evaluation of ICFR is also as of 12/31, and management's report states that ICFR is not effective due to the computer security problem causing the lack of separation of duties.
1. Draft Cohen and Single's combined audit report with opinions on the financial statements and ICFR as described.
2. Draft a management representations letter for Copley and Sons to submit to Cohen and Single LLP. The management representations letter should address all the points needed for both the financial statement and ICFR audits.