CPA · Question 68 · Area I: Ethics & General Principles
Scenario: An auditor is auditing the financial statements of a nonissuer. The auditor identifies a material weakness in internal control. The auditor's report on the financial statements is unmodified. The client requests that the auditor NOT communicate the material weakness to the audit committee because 'they already know about it'. <br/><br/>What is the auditor's responsibility?
Answer options:
The auditor may omit the communication if the audit committee acknowledges the weakness in the representation letter.
The auditor must communicate the material weakness in writing to the audit committee, regardless of their prior knowledge.
The auditor may communicate it orally.
The auditor need not communicate it if it was communicated in the prior year.
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