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Hi,
on communicating deficiencies and misstatements to those charged with governance,are we required to communicate only the significant deficiencies(i.e in internal control) and misstatements(i.e incorrect account balances) that have impact on financial statements and ignore the small errors. that’s what i’m reading from BPP relating to internal control deficiency(ISA 265).
well,my fear is what if this small errors/deficiencies could be material on aggregation currently or if not now(due to the set performance materiality) may do so in future as it is ignored on every audit exercise each year.
Thanks,kim.TCWG are only interested in what is material/significant – that doesn’t mean that everything else identified by the auditor is ignored. This is also from ISA 265:
“The auditor shall also communicate to MANAGEMENT at an appropriate level of
responsibility on a timely basis:
… Other deficiencies in internal control identified during the audit that have
not been communicated to management by other parties and that, in the
auditor’s professional judgment, are of SUFFICIENT IMPORTANCE to merit
management’s attention.”So something that could be significant in the future is of sufficient importance now.
got it. I must have read the standard halfway (as it was an answer to a question). thank you.
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