What does suitably designed mean on the CPA exam?
Suitably designed. The controls, if they operated as described, would achieve the stated objective. Design is a question about the blueprint; operating effectiveness is a question about what actually happened.
Defined against AT-C 320.16.
Which CPA exam sections use suitably designed?
Suitably designed appears in the ISC section of the CPA exam.
Other terms defined against AT-C 320
- 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.
- SOC 1 Type 1 report: A report on the fairness of the description and the suitability of the design of controls, at a point in time.
- SOC 1 Type 2 report: A report covering the description, the suitability of design, and the operating effectiveness of controls over a period.
Related terms
- operating effectiveness: Whether a control actually worked across the period, as opposed to whether it was well designed.
- written assertion: Management's own signed statement that the description is fair and the controls are suitably designed.
- tests of controls: Procedures that check whether a control actually operated as described throughout the period.
- complementary user entity controls: Controls a service organization assumes its customers are running.
- control objectives: What a set of controls is supposed to achieve, stated so that it can be tested.
- recognized gain: The part of realized gain that actually goes on the return this year.