chap 14.9 governance

Question 1

communication with those charged with governance

Answer 1

1.CAS 260 requires adtr to communicate adt matters of governance interest arising from adt of the FS with those charged of governance

2. for example, adtr identifies frauds or information indicating fraud. adtr needs to communicate with the appropriate level of mgt

3.for example, non compliance with laws and regulations, need to communicate with governance according to CAS 250

4. governance means people entrusted with the supervision, control and direction of the entity

5.those charged with governance are accountable fr ensuring the entity achieving its objectives with regards to the reliability of the financial reporting, effectiveness and efficiency of operations ad compliance with applicable laws and reporting to interested parties

Question 2

adt matter of governance interest

Answer 2

1.adt matters that arise during adt of FS and are important and relevant to those charged with governance

2. they are matters that come to adtr attention during adt prdrs and thus adtr need not to design adt prdrs to identify these matter

Question 3

adt matter of governance interest communicated P1

Answer 3

1. general approach and overall scope of the adt including the significant risks identified

2.selection or changes in sig. accounting policies that have or may have an impact on FS

3.material risks and exposures and their potential impact on FS

4. mISSTATEMNTs and their potential material effect on FS

5.Material uncertainty regarding going concern

Question 4

adt matter of governance interest communicated P2

Answer 4

6.disagreemENT with mgt having an impact on FS and adt report

7.expected modifications to the adt report

8.practical difficulties in performing adt

9.irregularities or suspected non compliance with laws and regulations identified

10.comments on internal controls designs and possible improvements that can be brought especially. in cases where weaknesses have been identified

11.other agreed matters from the terms of the adit enngmnt

12. uncorrected misstatement determined immaterial by mgt

Question 5

documentation

Answer 5

1. adtr retains a copy of the communication with those charged with governance together with their responses in their working papers to prevent disputes at a later date
2. reporting internal control deficiencies should be documented in the form of a letter or other files form such as minutes