Area I: Ethics & General Principles — CPA Practice Question 07

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Recall AU-C 265. Both Significant Deficiencies and Material Weaknesses must be communicated in writing to Management and Governance.

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B.Communicate the significant deficiency in writing to those charged with governance and management.✓ Correct

Communicate the significant deficiency in writing to those charged with governance and management.

AU-C 265 states that the auditor must communicate in writing to those charged with governance and management significant deficiencies and material weaknesses identified during the audit.

Common mistakes

Thinking only material weaknesses require communication; thinking oral communication is sufficient.

An auditor is conducting an audit of a nonissuer's financial statements. The auditor identifies a significant deficiency in internal control that is NOT considered a material weakness. Which of the following communications is REQUIRED?

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Practice the full CPA AUD Practice Exam 3

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