Audit Gleim 9.1
Which of the following statements about an auditor's communication of internal control related matters identified in an audit of a nonissuer is true?
The auditor should communicate significant internal control related matters no later than 60 days after the report release date.
Management may already know of the existence of significant deficiencies or material weaknesses in internal control. Which of the following is a true statement about the auditor's communication in this situation?
The auditor should communicate these control conditions in writing regardless of a decision by management and those charged with governance not to remedy them.
Which of the following is least likely indicative of a significant deficiency or material weakness in internal control?
A potential future internal control problem having no effect on the current period.
Which of the following statements about significant deficiencies and material weaknesses in internal control is true for an audit of a nonissuer?
An auditor may communicate significant deficiencies and material weaknesses during an audit or after the audit's completion.
Under the AICPA's auditing standards, which of the following statements about an auditor's communication of significant control deficiencies is true?
An auditor's report on significant control deficiencies should include a restriction on the use of the report.
Which of the following is true regarding significant deficiencies and material weaknesses in control for a nonissuer?
Auditors should communicate them to management and those charged with governance.
An auditor's written communication of internal control related matters identified in an audit would be addressed to "those charged with governance," which would include the
Board of directors
A secondary result of the auditor's understanding of internal control for a nonissuer is that the understanding may
Bring to the auditor's attention possible control conditions required to be communicated to the client.
The design or operation of a control may not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. According to AU-C 265, this circumstance is a
Control deficiency.
The development of constructive suggestions to a client for improvements in its internal control is a
Desirable by-product of an audit engagement.
Which of the following matters would an auditor most likely consider to be a significant deficiency or material weakness to be communicated to those charged with governance?
Evidence of a lack of objectivity by those responsible for accounting decisions.
Which of the following issues related to internal control over financial reporting are required to be communicated in writing to management and those charged with governance? I. Deficiencies in internal control II. Significant deficiencies III. Material weaknesses
II and III only
To what degree, if at all, is a significant deficiency related to a material weakness?
It is less severe than a material weakness.
Which of the following circumstances would be inappropriate for the auditor to communicate to those charged with governance?
No significant deficiencies in internal control exist that would affect the financial statements.
When reporting to the audit committee on conditions relating to an entity's internal control observed during an audit of a nonissuer's financial statements, the auditor should include a
Restriction on the use of the report.
Which of the following statements is true about the auditor's communication of a material weakness in internal control?
Suggested corrective action for management's consideration concerning a material weakness need not be communicated to the client.
A report on an issuer's integrated audit must include each of the following statements, except
The audit was conducted in accordance with AICPA standards.
Which of the following statements is true about significant deficiencies identified in an audit?
The auditor should identify those significant deficiencies considered to be material weaknesses.
An auditor is required to establish an understanding with a client regarding the services to be performed for each engagement. For an auditor of a nonissuer, this understanding generally includes
The auditor's responsibility for ensuring that management and those charged with governance are aware of any significant deficiencies or material weaknesses in control that come to the auditor's attention.
Which of the following best describes the responsibility of an auditor of a private entity with respect to significant deficiencies and material weaknesses under AU-C 265, Communication of Internal Control Related Matters Identified in an Audit?
The communication by the auditor must be in writing.
A CPA had previously communicated a significant control deficiency in connection with an audit of prior financial statements of a nonissuer. As of the current audit date, the deficiency has not been corrected. What communication should be made by the CPA?
The condition should be reported.
When communicating significant deficiencies in internal control noted in a financial statement audit of a nonissuer, the communication should indicate that
The purpose of the audit was to report on the financial statements, not to provide assurance on internal control.
Which of the following representations should not be included in a written report on internal control related matters identified in an audit under the AICPA's auditing standards?
There are no significant deficiencies or material weaknesses in the design or operation of internal control.
