Refer to the Standards Appendix at the end of this book. Identify the relevant auditing standards (PCAOB, AICPA, and IAASB) relating to communicating with audit committees. Locate the standards on each organization's web site.
a. Compare the scope of communication intended in the PCAOB standard versus that of the harmonized AICPA/ IAASB standards.
b. How do the AICPA/IAASB standards define "those charged with governance"?
c. The PCAOB standard notes that the prior auditing standard relating to this topic, AU 380 (1989), indicated that audit committee communications are incidental to the audit. The new PCAOB standard takes quite a different approach, articulating the critical importance of audit committee/auditor communication throughout the year, and certainly before the issuance of the audit report. Comment on why you think the profession has shifted its focus in this regard so significantly.
d. According to the PCAOB standard, what are the four objectives of the auditor in communicating with the audit committee?