Final answer:
The auditor should avoid initiating discussions that could compromise their independence or the audit process, such as confidential company information not related to audit findings.
Step-by-step explanation:
The question refers to the communication between auditors and those charged with governance in the context of corporate governance and the oversight of company executives. The auditor should always communicate findings that are significant during the audit, yet there are certain topics the auditor should not initiate. Specifically, the auditor should not initiate discussions with those charged with governance regarding matters that could compromise the auditor's independence or the audit process itself, such as confidential or strategic company information unless it pertains to the auditor's findings or is required by law.
Instances like the failure of corporate governance at Lehman Brothers, highlight the importance of transparent financial reporting and the auditor's role in ensuring the integrity of financial information presented to investors and the public.The auditor should not initiate discussion with those charged with governance concerning auditor independence or conflict of interest. This is to maintain objectivity and impartiality. Initiating such discussions could compromise the auditor's ability to provide an unbiased opinion on the company's financial statements.