What does description of the system mean on the CPA exam?
Description of the system. Management's account of the service it provides and the controls around it. In a SOC 2 the practitioner opines on whether that description is fairly presented, separately from whether the controls worked.
Defined against AICPA DC Section 200.
Which CPA exam sections use description of the system?
Description of the system appears in the ISC section of the CPA exam.
Related terms
- written assertion: Management's own signed statement that the description is fair and the controls are suitably designed.
- carve-out method: Excludes a subservice organization's control objectives and controls from both the description and the scope of the service auditor's report.
- inclusive method: Brings a subservice organization's controls inside the description and the scope of the service auditor's report, so one report covers both organizations.
- unqualified opinion: The clean opinion: the statements are presented fairly in all material respects.
- management's discussion and analysis: A narrative overview management provides ahead of the financial statements.
- contract asset: The right to consideration for goods or services already transferred, where the right still depends on something other than the passage of time.