Question

Which of the following is not true?

1) The auditor should not communicate with management until the audit of internal control over financial reporting is finished.
2) Written communication between the auditor and management about internal control over financial reporting should include the definitions of control deficiencies, significant deficiencies, and material weaknesses.
3) The auditor should not include in the audit report that no significant deficiencies were noted during an audit of internal control over financial reporting.
4) If fraud is discovered, the auditor must report it to the appropriate level of management.

Answer 1

The correct answer is 1) The auditor should not communicate with management until the audit of internal control over financial reporting is finished.

Step-by-step explanation:

The correct answer is 1) The auditor should not communicate with management until the audit of internal control over financial reporting is finished.

During the audit of internal control over financial reporting, the auditor should actively communicate with management to understand the design and implementation of controls and to assess any control deficiencies that might exist. Effective communication ensures that the auditor has a complete understanding of the controls and can provide an accurate assessment of the internal control system.

In contrast, options 2 and 4 are true statements. The auditor and management should have written communication that includes the definitions of control deficiencies, significant deficiencies, and material weaknesses. Additionally, if fraud is discovered during the audit, the auditor has a responsibility to report it to the appropriate level of management.

Option 3 is also true. If no significant deficiencies were noted during the audit of internal control over financial reporting, it is appropriate for the auditor to include this information in the audit report.