Question

What is the auditor's responsibility for communicating control deficiencies that are severe enough to be considered significant deficiencies or material weaknesses?

Answer 1

Basic duty of the auditor is to express opinion on financial statements whether it presents true and fair view of the organisation financial position.

in the process of getting an opinion on the financial statements the auditor will verify the internal controls of the organisation.

Based on the results of verification of financial statements alter will decide the nature, extent and timing of the audit procedures to be applied in the audit of financial statements.

If the internal controls of the organisation found weak when alter decides to apply more nature, timing and extent of audit procedures.

If if internal controls of organisation found very strong then after apply minimum nature, timing and extent of audit procedures.

In that case if internal controls found weak, alter will communicate those weaknesses in controls to the those charged with governance and management.

There is no minimum responsibility to report on controls of organisation but in the course of audit the ultimate communicate those deficiencies to those charged with governance or management.

In this case the weakness which are considered as material weakness are this may allow any people in the organisation to make frauds or fraudulent reporting.

Any deficiencies are considered as significant deficiencies if that item is able to affect the financial statements materially which may cause influence on the decision making of user of financial statements.

These are all the information required to solve the given question.

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