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Which of the following matters is an auditor required to communicate to those charged with governance?

1) The basis for assessing control risk at low.
2) The process used by management in formulating sensitive accounting estimates.
3) The auditor's preliminary judgments about materiality levels.
4) The justification for performing substantive procedures at interim dates.

User Psabbate
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Final answer:

An auditor is expected to communicate primarily about the materiality levels to those charged with governance as it affects the audit strategy and the usefulness of the financial information to the users. Other factors such as control risk assessment, accounting estimates process, and timing of substantive procedures may also be communicated if they are significant to the audit approach.

Step-by-step explanation:

The matters an auditor is required to communicate to those charged with governance can vary, but typically includes important aspects of their audit findings and methodology that could impact the financial reporting and decision-making of the organization. Among the items you've listed, the auditor's preliminary judgments about materiality levels are most commonly communicated to those charged with governance. This is because materiality affects risk assessments and planning of the audit work, as well as the understanding of the financial information provided to users. The basis for assessing control risk at a low level might be discussed if it significantly affects the audit approach. Similarly, communication regarding the processes used by management in formulating sensitive accounting estimates might take place if there are significant concerns or uncertainties that could impact financial statements. The justification for performing substantive procedures at interim dates may also be communicated if it has a significant effect on the audit strategy or risk assessment.

User Jeongbebs
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