Accountants and auditors are generally regarded as a regulatory or governing board requirement that inhibits the accomplishment of the organization's goals. These policies and procedures may not be consistency enforced or enforced at all. Over Reliance on One Individual. Under these circumstances, this individual establishes, implements, monitors, and enforces the controls within the entity. In many ways, nothing happens without the approval and signature of this person.
Heavy reliance is placed on the knowledge and actions of the one competent person.
As a result, CPAs engaged to audit the entity tend to rely heavily on the controls in place in a manner similar to that found in an owner-managed, small business. The problem with this scenario is obvious. Reliance on owner controls is based on the notion of an owner with his or her own capital at risk being actively involved in the day-today operations of entity. The CPA must understand the role of the board of directors and top management for the potential absence of mitigating controls. The key question is how much reliance should be placed on any one individual, no matter how trusted or competent that person might be.