TOP AUDITING ISSUES FOR 2013 - CCH

MODULE 1 — CHAPTER 3 — Performance Audits 33
Objectives and scope
Intended use
Procedures and findings
Assumptions and methods
Communicating with management, those charged with governance, and
others. This subsection requires that auditors should communicate an
overview of the audit’s objectives, scope, methodology, timing, and planned
reporting to:
Management
Those charged with governance
The individuals contracting for or requesting the audit
Cognizant legislative committees
Auditors should document this communication. They may do this with an
engagement letter, but are not required to do so.
This requirement, however, does not apply when making that
communication could significantly impair the auditor’s ability to obtain audit
evidence, such as for unannounced cash counts or in cases of suspected fraud.
When the identities of those charged with governance is not readily
evident, auditors should document the process followed and conclusions
reached in determining who should receive required audit communications.
When an audit is terminated before completion and a report is not issued,
auditors should document:
The results of the audit to the date of termination
The reason for termination
STUDY QUESTION
3. Auditors should communicate an overview of the audit’s objectives, scope,
methodology, timing, and planned reporting:
a. In an engagement letter
b. To management and those charged with governance
c. To regulators charged with program oversight
d. In cases of suspected fraud
Preparing a written audit plan. This subsection of the Yellow Book contains
an unconditional requirement that auditors must prepare a written audit
plan for each audit. They should update that plan as necessary to reflect any
significant changes made during the audit.