Internal Reports to Management

Question 1

Engagement letter covers:

Answer 1

who report will be sent to (directors/audit committee), how and when it will be sent

only covers matters that have come to auditor’s attention as part of the audit

auditor not required to test all internal controls

Question 2

Audit Report

Answer 2

Auditor’s responsibilities:

• opinion on whether FS are free from material misstatement and give a true and fair view
• opinion on whether Director’s/Strategic Report are consistent with FS

Significant findings:

• written reps requested
• opinion on accounting policies, estimates and disclosures
• difficulties during the audit
• auditor independence and ethical compliance (listed companies)
• deficiencies in internal control identified as part of the audit:
• describe deficiency
• effect of deficiency

• disclaimer so that third parties do not rely on it