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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reports to those charged with governance and management

The auditor of Tavin Co is drafting a written communication of a significant deficiency in internal control to those charged with governance. Which content is required by ISA 265?

The communication must describe the significant deficiencies and their potential effects, and state that the audit was performed to express an opinion on the financial statements and so may not identify all deficiencies. The auditor cannot guarantee completeness or take over remediation, which would impair independence.

  1. AA statement that the audit purpose was to express an opinion on the financial statements and that the audit was not designed to identify all deficiencies, plus a description of the deficiencies and their potential effectsCorrect
  2. BA guarantee that all control deficiencies in the company have been identified and reported
  3. CDetailed remediation steps that the auditor will implement on management's behalf
  4. DA statement that no other deficiencies exist because none are mentioned

Explanation

ISA 265 requires the written communication to describe the significant deficiencies and explain their potential effects, and to indicate that the audit purpose was to express an opinion on the financial statements, so the auditor's work does not identify all deficiencies. The auditor cannot give assurance that all deficiencies were found, and implementing remedies would threaten independence.

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