Question

Auditors communicate significant findings or issues from the audit to those charged with governance _______.

A. Typically at the beginning of the audit.
B. Typically during the audit.
C. Typically towards the end of the audit.
D. Via the client's legal counsel.

Answer 1

Auditors communicate significant audit findings typically towards the end of the audit to the board of directors, which plays a key role in corporate governance. This communication is a crucial aspect of the audit process and is vital for informed decision-making and investor confidence.

Step-by-step explanation:

Auditors usually communicate significant findings or issues from the audit to those charged with governance typically towards the end of the audit.

This ensures that any significant matters that have come up during the audit process are brought to the attention of those responsible for overseeing the management of the company, such as the board of directors.

The board, being the first line of corporate governance and oversight, needs to be aware of these findings to make informed decisions.

The audit's role is crucial in providing assurance that a company's financial records are fair and reasonable. In the case of failures like with Lehman Brothers, it is clear that effective corporate governance is essential in maintaining investor confidence.