Snow, CPA, was engaged by Master Co., a nonissuer, to examine the effectiveness of Master’s internal control over financial reporting as part of an integrated audit. Snow’s report should state that
Because of inherent limitations, internal control may not prevent, or detect and correct, misstatements.
The auditor’s report states that because of its inherent limitations, internal control over financial reporting may not prevent, or detect and correct, misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risks that (1) controls may become inadequate because of changes in conditions or (2) the degree of compliance with the policies or procedures may deteriorate (AT 501).