Video: Introduction to Engagement Communication

This lesson delves into the crucial aspect of engagement communication, discussing the interactions between auditors, management, and those charged with governance. It highlights the significance of effective communication in every situation, regardless of company size or governance structure, and examines how different considerations arise when those charged with governance are also involved in the company's management. The lesson also acknowledges the necessity of maintaining constant communication during an audit to ensure its effectiveness and timeliness. Lastly, an overarching framework for communication with those charged with governance is provided, along with specific matters to be communicated.

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Video Transcript

Instructor: Nick Palazzolo

Nick Palazzolo is head instructor of ExamPrep.ai CPA Review. Nick's teaching style is engaging & upbeat, combining practical Big 4 tax & assurance expertise with years of 1-on-1 coaching. His lessons are concise and emphasize what you need to know to pass. Whether you're a recent grad or working full-time, we’re confident you can conquer your CPA exams with Nick’s review.

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Let's dive into the material we've got on engagement communication. Here in this section, we are going to discuss communication between different parties. You've got the auditor, you've got management, you've got those charged with governance, right? We've got all these individuals. Who is going to talk to who? When are they going to do it? How often are they going to do it? Going to be critically important. Although this section applies regardless of an entity's governance structure or size, meaning this is going to apply if we're talking a hundred billion dollar company with 3000 employees, or we're talking about a company that only makes a million dollars a year and they are say a hundred employees. This is going to be important because particular considerations apply when all of those charged with governance are involved with managing an entity. In practice, a lot of us may think, okay, big firm, big company, right? We've got the normal structure of your board of directors, those charged with governance over here, and then you get audit committee off over here. And then you've got management down below here. However, if you've got a hundred people, maybe the owners of the company, it's a family-run business. You've got three of the kids of the family, right? They run the business. They are essentially the board of directors, but they also manage the company. That's an intermingling of these two responsibilities. And as we know, those who manage the company are usually the CFO, CEO, those in charge of the operations, and those charged with governance are there to keep them in check and make sure the overarching plan of the company is followed out. So we're going to talk here about, okay, what happens if this is co-mingling? What if

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Obtaining Evidence & Engagement Communication

Module: 3 Concepts, 49 Videos

Engagement Communication Overview

0:32

Engagement Communication Objectives

1:16

Introduction to Engagement Communication

2:46

Auditor's Communication Objectives