Video: Communication with Management and Those Charged with Governance

This lesson covers the communication rules set forth by SOX, the PCOB, and the SEC, specifically focusing on communication between auditors and an entity's management and those charged with governance (such as the board of directors). The lesson emphasizes the importance of auditors communicating any significant deficiencies, material weaknesses, and detected fraud within the management level to both management and those charged with governance. It also highlights the need to inform those charged with governance about disagreements with management, an overview of the audit's plan, scope, and timing, and significant adjustments to the financial statements resulting from the audit. Furthermore, the lesson explains that when auditors communicate these issues in writing, the report should include definitions, emphasize the purpose of the audit, and indicate it as a restricted-use report.