ExpertMedium1 markMultiple Choice
CPA · Question 55 · Area 1: Ethics
Which of the following statements is true regarding the auditor's communication with those charged with governance (the Audit Committee)?
Which of the following statements is true regarding the auditor's communication with those charged with governance (the Audit Committee)?
Answer options:
A.
The auditor is only required to communicate if material misstatements are found.
B.
The auditor must communicate significant difficulties encountered during the audit.
C.
All communications must be in writing.
D.
The auditor must communicate the specific procedures to be performed in the fraud audit.
How to approach this question
Recall AU-C 260. Difficulties, Disagreements, and Deficiencies must be communicated.
Full Answer
B.The auditor must communicate significant difficulties encountered during the audit.✓ Correct
The auditor must communicate significant difficulties encountered during the audit.
The auditor must communicate with those charged with governance regarding the planned scope and timing of the audit, significant findings (including difficulties), and auditor independence.
Common mistakes
Thinking all communications must be written (only some, like significant deficiencies, require writing).
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