Final answer:
The purpose of discussions between the audit firm and the audit committee is to ensure the auditor's independence and effectiveness, and to maintain transparency about financial reporting and compliance matters.
Step-by-step explanation:
Discussions with the audit committee undertaken by the audit firm are designed to ensure auditor independence, effectiveness, and communication regarding the financial health and compliance of the entity being audited. These conversations are vital to maintain a clear and continuous dialogue about the performance and integrity of financial reporting. They also aim to make certain that the auditor is aware of any concerns the committee may have and that any significant risks are appropriately managed and communicated. By engaging in regular communication, both the audit firm and the audit committee can work collaboratively to address issues and improve processes and controls.