Audit of Financial Statements and Internal Control
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What factors may be relevant to the timing of communications between an auditor and those charged with governance?

  • The color of the entity's logo and the auditor's office location
  • The weather conditions at the time of the audit and the auditor's favorite TV show
  • The auditor's preferred communication method and the entity's social media presence
  • The size and legal structure of the entity being audited (correct)

    • In what scenario should an auditor communicate significant difficulties encountered during the audit?

  • When they want to show off their audit skills
  • When they are bored during the audit
  • When they anticipate a modified opinion or if those charged with governance can assist in overcoming the difficulties (correct)
  • When they need advice for personal matters

    • What is one aspect an auditor should take into consideration regarding the entity being audited?

  • The number of vacations taken by the auditing team
  • The distance between the auditor's office and the entity's location
  • The control environment and legal structure (correct)
  • The auditor's favorite food and music taste

    • Why is two-way communication between the auditor and those charged with governance considered important?

    <p>To ensure effective communication for the purpose of the audit</p> Signup and view all the answers

    When should an auditor communicate a material weakness identified during the audit?

    <p>Timely to enable appropriate remedial action</p> Signup and view all the answers

    What should an auditor evaluate regarding communication between them and those charged with governance?

    <p>Whether two-way communication has been adequate for the purpose of the audit</p> Signup and view all the answers

    Why does effective two-way communication benefit both auditors and those charged with governance?

    <p>It assists in fulfilling audit objectives and expectations of governance</p> Signup and view all the answers

    What factors may influence the form of communication an auditor chooses to use?

    <p>The legal or regulatory requirements</p> Signup and view all the answers

    In the context of auditor communication, what could be a reason for choosing formal presentations over less formal communications?

    <p>Significance of the matter being communicated</p> Signup and view all the answers

    When deciding on the extent of detail to include in a communication, what is a relevant factor for an auditor to consider?

    <p>Whether the matter has been satisfactorily resolved</p> Signup and view all the answers

    What aspect may affect whether an auditor chooses to communicate orally or in writing?

    <p>Whether management has communicated the matter before</p> Signup and view all the answers

    In what situation would an auditor be more likely to use a formal communication style?

    <p>When there are significant changes in the governing body</p> Signup and view all the answers

    What is a factor that may lead an auditor to communicate more informally?

    <p>Regular scheduled meetings with those charged with governance</p> Signup and view all the answers

    Why might an auditor choose to communicate orally rather than in writing?

    <p>When the matter has already been fully resolved</p> Signup and view all the answers

    Which factor could potentially lead an auditor to use more detailed written communications?

    <p>Significant changes in management personnel</p> Signup and view all the answers

    What is a common reason for an auditor to communicate orally in a less formal manner?

    <p>High level of ongoing contact with those charged with governance</p> Signup and view all the answers

    Why might an engagement letter be considered an important form of communication from an auditor?

    <p>As a way to inform those charged with governance of audit findings and terms of engagement</p> Signup and view all the answers

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