SOX difficulty of Assessing Material Impact and Significant Deficiency

  • Accountant
  • CRMA
  • CFE
  • CGAP
  • CGFM
  • CIA
  • CMA
  • CPA (US)
  • CVA
  • IAP
  • QIAL
  • CWS

Published: May, 2022

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  • Course Description
  • Course Qualification
  • Presenter
  • FAQ

Course Description

Course Description

Per AS5, the auditor must evaluate the severity of each control deficiency to determine whether the deficiencies, individually or in combination, are material weaknesses. The trick is…..what parameters should be considered when determining materiality.

In planning and performing the audit, the auditor is not required to search for deficiencies that, individually or in combination, are less severe than a material weakness. There are several definitions of materiality utilized in the profession that is promulgated by the AICPA, PCAOB, COSO, and others. This 2 CPE webinar will evaluate the various definitions such as COSO definitions of major deficiency, AU 325, and AS5 which are utilized by the Committee of Sponsoring organizations. Numerous examples related to Reconciliations, Standard Sales Contract,s, and several deficiencies will also be discussed during this 2 CPE webinar. 

This online CPE webinar will cover several aspects of the concepts of material weakness and significant deficiency.  We will evaluate recent cases of material weakness disclosures and updates from the PCAOB and its priorities.

Major topics covered in this online CPE webinar:

  • COSO definitions of major deficiency
  • AU 325 Definitions
  • AS5 definitions 
  • Assessing deficiency impact
  • Indicators of a material weakness
  • Examples 1 & 2 – Reconciliations
  • Examples 3 & 4 – Standard Sales Contract
  • Examples 5 & 6 – Several Deficiencies
  • Examples of recent Material Weaknesses
  • Deficiency communication
  • Deficiency history and restatement study
  • Study on the impact on earnings
  • August 2015 PCAOB update
  • PCAOB priorities

You might be interested in the Certification course for SOX Specialists.


  • 1.1 Introduction
  • 00:05:44
  • 1.2 Agenda
  • 00:02:25

  • 2.1 COSO Major Deficiency
  • 00:12:37

  • 3.1 AU 325
  • 00:06:50

  • 4.1 Deficiency
  • 00:07:00
  • 4.2 Design, Operating, and Significant Deficiency
  • 00:04:19
  • 4.3 Material Weakness
  • 00:02:50
  • 4.4 Aggregation
  • 00:01:18

  • 5.1 Deficiency severity
  • 00:01:48
  • 5.2 Risk factors
  • 00:02:54
  • 5.3 Magnitude
  • 00:02:56

  • 6.1 Indicators of Material weakness
  • 00:04:46
  • 6.2 Examples of Material weakness
  • 00:18:50
  • 6.3 Examples of Recent Material Weaknesses
  • 00:15:51

  • 7.1 Deficiency history and restatement study
  • 00:08:02

  • 8.1 Earnings impact on restatement
  • 00:03:23

  • 9.1 PCAOB update
  • 00:05:41
  • 9.2 PCAOB citation on finding
  • 00:03:37
  • 9.3 PCAOB priorities
  • 00:02:38

  • 10.1 Summary
  • 00:02:22
  • 10.2 Ending Speech
  • 00:00:42

Learning Objectives

  • To define a top-down accounting RA.
  • To identify the importance of entity-level controls.
  • To discuss the types of entity control.
  • To discover assertions and significant accounts.
  • How to link controls to financial statement assertions.
  • To examine COSO principles to evaluate the existence of required controls.
  • To identify controls.

Recommended For

  • This online CPE webinar for CPAs is recommended for internal as well as external auditors interested in developing skills in assessing material impact and significant deficiency while auditing.

Who Should Attend?

  • Accountant
  • Accounting Firm
  • Accounting Managers
  • Auditors
  • Certified Public Accountant (CPA)
  • Cloud Accountants
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Entrepreneurial Accountant
  • Entrepreneurial CPA
  • Senior Accountant
  • Staff of Accounting Firm
  • Young CPA

Course Qualification

Webinar Qualifies For

  • 2 General Credit for Accountant/Bookeeper
  • 2 CPE Credit of Auditing for Certified Public Accountants (CPA-US)
  • 2 CPE Credit for Internal Audit Practitioner (IAP)
  • 2 CPE Credit for Certification in Risk Management Assurance (CRMA)
  • 2 CPE Credit of Internal Auditing for Certified Internal Auditors (CIA)
  • 2 CPE Credit of Auditing for Certified Management Accountants (CMA)
  • 2 CPE Credit for Qualification in Internal Audit Leadership (QIAL)
  • 2 CE Credit for Certified Fiduciary & Investment Risk Specialist (CFIRS)
  • 2 CE Credit for Certified Wealth Strategist (CWS)
  • 2 CPD Credit of Auditing for Certified Financial Forensics (CFF)
  • 2 CPE Credit of Auditing for Certified Fraud Examiner (CFE)
  • 2 CPE Credit for Certified Government Auditing Professional (CGAP)
  • 2 CPE Credit for Certified Government Financial Manager (CGFM)
  • 2 CPE Credit of Auditing for Certified Valuation Analyst (CVA)
  • 2 CPE Credit of Auditing for Certified Business Appraiser/Master Certified Business Appraiser (CBA/MCBA)

Additional details

  • Course Level :
  • Credits :
  • Instructional Method :
    QAS Self Study
  • Pre-requisites :
  • Advance Preparation :


MY-CPE LLC, 1600 Highway 6 south, suite 250, sugar land, TX, 77478

MY-CPE LLC (Sponsor Id#: 143597) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website:


About Presenter

Lynn Fountain, CRMA, CPA (US), CGMA, MBA

Owner, Lynn Fountain Consulting and Training

Lynn Fountain has over 39 years of experience spanning public accounting, corporate accounting and consulting. 20 years of her experience has been working in the areas of internal and external auditing and risk management. She is a subject matter expert in multiple fields including internal audit, ethics, fraud evaluations, Sarbanes-Oxley, enterprise risk management, governance, financial management and compliance.  Lynn has held two Chief Audit Executive (CAE) positions for international companies.   In one of her roles as CAE, she assisted in the investigation of a multi-million-dollar fraud scheme perpetrated by a vendor that spanned 7 years and implicated 20 employees.  The fraud was formally investigation by the FBI and resulted in 5 indictments estimating a $13M fraud loss.

Ms. Fountain is currently engaged in her own consulting and training practice.  She has successfully executed on several consulting assignments spanning areas of accounting, risk, ERM and internal audit.  She is a highly sought-after trainer and international speaker and has produced hundreds of courses delivered through seminars, conferences and on-demand training.  She is the author of three separate technical books. 

  • Raise the Red Flag – The Internal Auditors Guide to Fraud Evaluations”.
  • Leading the Internal Audit Function
  • Ethics and the Internal Auditor’s Dilemma

Ms. Fountain obtained her BSBA from Pittsburg State University and her MBA from Washburn University in Kansas. She has her CPA, CGMA, CRMA credentials. 

About Company

Lynn Fountain Consulting and Training

Ms. Fountain has become known as an international trainer on topics of Leadership, Internal Audit, Accounting, Finance, Ethics, Business Processes, Bookkeeping, Cybersecurity and Business Issues.  She has over 150 training topics that can be tailored to meet your needs.


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