Question
According toAS 1305: Communications About Control Deficiencies in an Audit of Financial Statements, what must the auditor communicate to management and the audit committee (as
According toAS 1305: Communications About Control Deficiencies in an Audit of Financial Statements,whatmust the auditor communicate to management and the audit committee (as related to internal controls)? Inwhat formmust this communication take place? If your client does not have an audit committee,whoshould be informed instead?
Now imagine your audit team is auditing a public client with a December 31 year-end. Your team is completing interim control testwork in July (i.e., testwork before year-end), and you encounter what is likely going to be a material weakness in internal controls around revenue (i.e., revenue recognition). Following guidance inAS 1305: Communications About Control Deficiencies in an Audit of Financial Statements,whendo you think your team should communicate the material weakness to the client?Why?
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