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Hi I am revising this area using questions from the BPP revision kit and came across ISA 265 which i cannot find in the opentuition notes…
could you explain the meaning of ‘communicating deficienies in internal control to those charged with governance and management’ I do not understand charged with governance could you please explain, then hopefully the answer will make more sense to me?
Thanks You
In a company, those charged with governance are the directors and/or audit committee. In a school it would be the board of governors. In a trust it would be the trustees.
Communicating deficiencies is simply explaining problems encountered with the internal control system or with its operation. Generally the communication is called a letter of internal control weakness (rather an old term) or a management letter. The letter is usually set out in three columns:
Nature of weakness Implications of weakness How to fix the weakness
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