Which of the following matters is an auditor required to communicate to those charged with governance?

Answer options:

All immaterial errors found during the audit.

Disagreements with management about significant accounting matters, whether or not resolved.

The specific procedures to be performed in the upcoming audit of cash.

The auditor's preliminary assessment of materiality.

How to approach this question

Recall AU-C 260. Governance needs to know about friction between auditor and management.

Full Answer

B.Disagreements with management about significant accounting matters, whether or not resolved.✓ Correct

AU-C 260 requires the auditor to communicate significant findings, including disagreements with management regarding accounting principles, scope, or disclosures, even if those disagreements were eventually resolved. This ensures governance is aware of potential management bias or pressure.

Common mistakes

Thinking resolved disagreements don't matter.

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