Video: Public Company Integrated Audits

In this lesson, Nick Palazzolo, CPA, explains the public company integrated audit, in which the auditor audits both the financial statements and internal control over financial reporting (ICFR). The two audits are planned and performed together, but each has its own objective and its own opinion. Nick shows why market capitalization is not the test for whether an auditor ICFR attestation is required: the answer depends on the company's SEC filer status, which looks at public float and, in some cases, revenue, and some smaller reporting companies and emerging growth companies are exempt. Under PCAOB AS 2201, the auditor expresses an opinion on the effectiveness of the company's internal control over financial reporting itself, not merely on management's report. Nick then connects the integrated audit to the audit risk model: the auditor assesses inherent risk and control risk, adjusts planned detection risk through the nature, timing and extent of procedures, and still obtains sufficient appropriate evidence for each opinion.