AUD 5.2 - Communication And Reporting In An Integrated Audit Flashcards
To who and by when should control deficiencies be communicated to in an integrated audit for nonissuers?
To management, in writing, within 60 days oof the report release date
To who and by when should significant deficiencies be communicated to in an integrated audit for nonissuers?
To management and those charged with governance, in writing, by the report release date
To who and by when should material weaknesses be communicated to in an integrated audit for nonissuers?
To management and those charged with governance, in writing, by the report release date
To who and by when should control deficiencies be communicated to in an integrated audit for issuers?
To management in writing (also inform the audit committee that this communication was made) , no due date
To who and by when should significant deficiencies be communicated to in an integrated audit for issuers?
To management and the audit committee in writing (no due date)
To who and by when should material weaknesses be communicated to in an integrated audit for issuers?
To management and the audit committee, in writing, prior to the issuance of the auditors report
The auditor must report directly on the effectiveness of the entity’s internal controls and the financial statement in an integrated audit. Those reports can be separate or combined. If separate, what should be added to each report for a nonissuer and an issuer?
Nonissuer: each report should contain an other matter paragraph making reference to the other report
Issuer: each report should contain an explanatory paragraph making reference to the other report
What paragraph is VERY important to be included in an auditors report over internal controls in an integrated audit?
The inherent limitations paragraph
“Because of its inherent limitations, internal control over financial reporting may not prevent, or detect and correct misstatements….”
The presence of a material weakness in an issuer or nonissuers integrated audit results in what opinion? What should be done regarding the audit report?
Adverse opinion
Include a “basis for adverse opinion paragraph” defining the term “material weakness” and stating the material weaknesses identified. There should also be a basis of opinion paragraph added following the opinion paragraph.
In an issuer or nonissuer integrated audit, if managements report fails to include one or ore material weaknesses identified by the auditor, what should happen?
The auditors report should state this and describe the omitted weaknesses
In an issuer or nonissuer integrated audit, if managements report includes a material weakness but does not fairly present the weakness, what should happen?
The auditors report should indicate this situation and should fairly describe the material weakness
If there is a scope limitation to the integrated audit of an issuer or nonissuer, what should happen?
The auditors should withdraw or issue a disclaimer of opinion
When disclaiming an opinion due to a scope limitation, the auditor should do what to the audit report for issuers and nonissuers?
Issuers: state that an opinion is not being expressed in the “disclaimer of opinion section” and list the reasons why in the “basis for the disclaimer of opinion” section.
If before the date of the auditor report, the auditor obtains information about a matter that existed on the “”as of” date of the report that results in a material weakness, what should happen?
An adverse opinion would be issued
If the auditor obtains information about conditions that arose subsequent to the “as of” date of the auditors report, what should happen?
This information should be included in an explanatory paragraph of the report
