Question

Assume that in connection with your audit of the financial statements of Cheatum, Inc. you have identified some circumstances that may be considered deficiencies in internal control -indeed some might be considered significant deficiencies or even material weaknesses.

Answer the following questions about Andy Auditor, the job's senior, which abstracts (summarizes) from the professional standards (AU-C 265, effective for audits of financial statements for periods ending on or after December 15, 2012).

1. Whether a preference exists in the standards on whether any communication need be in writing versus presented orally to the audit committee or those charged with governance.

2. Whether deficiencies of which an audit committee (or those charged with governance) is already aware must be communicated again to the audit committee.

Assume that this is the audit of a nonpublic company for which no overall public reporting responsibility relating to internal control is required under the Sarbanes Oxley Act of 2002. Also, include an exact citation to the professional standards paragraph(s) in which you find the guidance.

Answer 1

1. Whether a preference exists in the standards on whether any communication need be in writing versus presented orally to the audit committee or those charged with governance.

Ans : Every time its better to have a written communicaton for any audit related issues explaining the detail of the statements if required with attachments.

2. Whether deficiencies of which an audit committee (or those charged with governance) is already aware must be communicated again to the audit committee.

Assume that this is the audit of a nonpublic company for which no overall public reporting responsibility relating to internal control is required under the Sarbanes Oxley Act of 2002. Also, include an exact citation to the professional standards paragraph(s) in which you find the guidance.

Ans : Even if the public is aware of the deficiencies it is good to be held a audit committee