To whom should audit findings be reported?

To whom should audit findings be reported?

• A. Those charged with governance
• B. External customers
• C. External auditors only
• D. No specific requirement

Answer: (A)

Auditors are required to communicate significant audit findings to those charged with governance. This group, typically the board or audit committee, is responsible for oversight and for ensuring that management takes appropriate corrective action. Sharing findings with them ensures the right people receive timely, actionable information to monitor and improve the entity’s financial reporting and controls. External customers don’t have governance responsibility, and reporting only to external auditors would bypass the oversight role. There is a professional duty to report such matters to those charged with governance, with management receiving other related communications as appropriate.

Auditors are required to communicate significant audit findings to those charged with governance. This group, typically the board or audit committee, is responsible for oversight and for ensuring that management takes appropriate corrective action. Sharing findings with them ensures the right people receive timely, actionable information to monitor and improve the entity’s financial reporting and controls. External customers don’t have governance responsibility, and reporting only to external auditors would bypass the oversight role. There is a professional duty to report such matters to those charged with governance, with management receiving other related communications as appropriate.