| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #6752 | Closed | public | FHA Lender | Les Sparks |
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Just curious. If a Title II lender has an outside QC firm conducting reviews, does this have any effect on the sample size required by the independent auditor? |
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From Les Sparks: The answer is generally no, it does not. Having the client use an outside QC vendor simply outsources the internal control function to a 3rd party. There is no specific benefit to a 3rd party. I Know they think it does, but it does not. Frankly, most CPAs find that the outside QC actually increases risk as it tends to make the client think that someone else is responsible for internal control and not them. We find internal QC to generally be more effective. The overall process for sample determination remains the same under either method. IR X CR = RMM. RMM determines sample size. The minimum for a population over 250 is 25. That is a low-risk sample. Les |