Question

To enhance communications with top management, some internal audit activities include a summary report with each written engagement communication. What information should be included in such a summary report?

1) highlights of the engagement results
2) the same information as the written report but in diagram form
3) only that information needed to resolve the disagreements between the engagement clients and the internal auditors
4) the internal auditor's assessment of the adequacy of internal controls

Answer 1

A summary report for top management accompanying a written engagement communication should include the highlights of the engagement results, visuals like graphs and charts, and the internal auditor's assessment of internal controls.

Step-by-step explanation:

To enhance communications with top management, a summary report included with each written engagement communication should provide an efficient and clear understanding of the most critical information. Primarily, it should include highlights of the engagement results to give a snapshot of the main findings or outcomes. Additionally, incorporating visual aids such as graphs, charts, and diagrams can present the same information in a more digestible format, aiding in quicker comprehension. It is also essential for the summary report to contain an internal auditor's assessment of the adequacy of internal controls, which informs management of any potential risks or weaknesses that need attention. While disagreements between engagement clients and auditors may be included, they are not the sole focus of the summary unless they significantly impact the engagement's results.