Question

Which of the following statements about the relationships between the auditor and management is true?

A. Auditors can use the work of management’s assessment of ICFR per PCAOB AS#5 in conducting their own assessment.

B. Management can use the work of the auditor’s assessment of ICFR per PCAOB AS#5 in conducting their own assessment.

C. Neither the auditor nor management can use the other’s work on their assessment of ICFR per PCAOB AS#5 in conducting their own assessment.

Answer 1

As per PCAOB Auditing Standard 5" An Audit of Internal Control Over Financial Reporting That Is Integrated with An Audit of Financial Statements":

• The auditor should use the same suitable, recognized control framework to perform his or her audit of internal control over financial reporting as management uses for its annual evaluation of the effectiveness of the company's internal control over financial reporting.

Based on the above following statement is True:

A. Auditors can use the work of management’s assessment of ICFR per PCAOB AS#5 in conducting their own assessment.