The auditor should communicate audit matters of governance interest arising from an audit of financial statements to those charged with governance in a timely manner. Audit matters of governance interest include the scope of the audit, significant risks to the financial statements, adjustments made by management, and uncertainties about the entity's ability to continue as a going concern. The auditor initially discusses such matters with management but communicates directly with those charged with governance when matters relate to management competence or integrity.
The auditor should communicate audit matters of governance interest arising from an audit of financial statements to those charged with governance in a timely manner. Audit matters of governance interest include the scope of the audit, significant risks to the financial statements, adjustments made by management, and uncertainties about the entity's ability to continue as a going concern. The auditor initially discusses such matters with management but communicates directly with those charged with governance when matters relate to management competence or integrity.
The auditor should communicate audit matters of governance interest arising from an audit of financial statements to those charged with governance in a timely manner. Audit matters of governance interest include the scope of the audit, significant risks to the financial statements, adjustments made by management, and uncertainties about the entity's ability to continue as a going concern. The auditor initially discusses such matters with management but communicates directly with those charged with governance when matters relate to management competence or integrity.
Definitions PSA 260 Relevant Persons The auditor should communicate audit matters
Governance - term used to describe the role of
persons entrusted with the supervision, control COMMUNICATIONS OF AUDIT of governance interest arising from the audit of MATTERS WITH THOSE financial statements with those charged with and direction of an entity. CHARGED WITH GOVERNANCE governance of an entity. Audit matters of governance interest - are those that arise from the audit of financial statements and, in the opinion of the auditor, are The auditor should communicate Who are TCWG? both important and relevant to those charged audit matters of governance interest An audit engagement letter with governance in overseeing the financial arising from the audit of financial may; a.) For corporations reporting and disclosure process. statements with those charged with covered by the SEC a.) explain that the auditor will Code of Corporate governance of an entity. communicate only those Governance = BOD’s The Auditor should consider audit matters of Audit Matters to be Communicated matters of governance interest that comes to attention as a b.) For other entities= governance interest that arise from the audit of the auditor uses judgment financial statements and communicate them with result of the performance of an 1.) The general approach and overall scope of to determine those those charged with governance. audit. the audit, including any expected limitations persons. thereon. b.) Describe the form in which Timing of Communications c.) When the entity’s 2.) The selection of significant accounting any communications on audit governance structure policies and practices that have a material matters of governance interest is not well defined= effect on the entity’s financial statements. will be made auditor comes to an The auditor should communicate audit matters of 3.) The potential effect on the financial agreement with the governance interest on a timely basis. c.) Identify the relevant statements of any significant risks and entity to whom to exposures that are required to be disclosed in persons with whom such communicate. the financial statements. communications will be made. Forms of Communications 4.) Audit adjustments, whether or not recorded d.) Identify any specific audit by the entity that has a significant effect on the matters of governance interest The auditor’s communications with those charged entity’s financial statements. which it has been agreed are with governance may be made orally or in writing. 5.) Material uncertainties related to events and to be communicated. conditions that may cast significant doubt on the entity’s ability to continue as a going concern. When audit matters of governance interest are 6.) Expected modifications to the auditor’s The auditor considers whether audit communicated orally, the auditor documents in report. matters of governance interest previously the working papers the matters communicated 7.) Any other matters agreed upon in the terms communicated may have an effect on the and any response to those matters. of the audit engagement. current year’s financial statements. Confidentiality
If the auditor considers that a
Auditor initially discusses audit matters of Other Matters The Code of Ethics for Certified Public modification of the auditor’s report on governance interest with management, except Accountants promulgated by the Board of the financial statements is required, where those matters relate to questions of Accountancy imposes obligations of confidentiality communications between the auditor management competence or integrity. that restrict the auditor’s communications of audit and those charged with governance matters of governance interest. cannot be regarded as a substitute.