A2 Communication & Reporting on Integrated Audit

Question 1

3 Levels of Concerns

Answer 1

Three level of concerns that should be corrected & communicated during an integrated audit. Material Weakness, significant deficiencies, and control deficiencies.

Significant deficiencies, and control deficiencies must be done inn writing to mgmt & those charged with governance by the report release date.

Question 2

Reporting All Deficiencies

Answer 2

All deficiencies other than material weaknesses & significant deficiencies should be communicated in writing no later than 60 days after the report release date.

Question 3

Nonissuer Reports

Answer 3

There’s two ways of issuing a report on internal controls.

1)There is a separate report issued for the FS & the ICFR. Includes headings for Opinion on ICFR, basis for opinion, auditor & mgmt responsibilities for ICFR, definition & inherent limitations of ICFR on legal requirements, & report on audits of ICFR.

2) A combined report that contains both the FS & opinion on internal control. Includes headings for Opinion on ICFR, basis for opinion, auditor & mgmt responsibilities for ICFR, definition & inherent limitations of ICFR on legal requirements, & report on audits of ICFR, and the added last heading for Basis of adverse opinion if controls aren’t working well.

Question 4

Adverse Opinion

Answer 4

A material weakness requires the auditor to issue an adverse opinion. The auditor’s report must include the definition of a material weakness, a statement that a material weakness has been identified & therefore the entities ICFR cannot be considered effective, & an identification of the material weakness described in mgmt assessment.

Question 5

Disclaimer Opinion

Answer 5

When issuing a report with a disclaimer due to scope limitation (if the auditor didn’t withdraw) the auditor should state that an opinion is not being expressed with the disclaimer of opinion on ICFR section, & list the substantive reasons for the disclaimer within the basis for disclaimer of opinion of ICFR section.

Question 6

Subsequent Events

Answer 6

If before the date of the audit report, the auditor obtains information about a matter existed on the “as of” date of the report, appropriate action should be taken such as including that info in an Explanatory Paragraph.