To whom do auditors report deficiencies found in accounting and control systems?

To whom do auditors report deficiencies found in accounting and control systems?

• A. Those charged with governance, i.e. directors.
• B. Management.
• C. Shareholders.
• D. Regulators.

Answer: (A)

Communicating control deficiencies is directed to those charged with governance because they are responsible for overseeing the financial reporting process and ensuring corrective actions are taken. This group, typically including the board of directors and the audit committee, has the authority and duty to oversee internal controls and to address any weaknesses shown by the audit. By reporting to governance, the auditor provides independent oversight and enables timely remediation, which governance can monitor and escalate as needed. Management is informed so they can fix the issues, but the formal report of deficiencies is directed to those charged with governance. Regulators or shareholders are not the standard recipients of these internal-control findings unless specific regulatory requirements apply.

Communicating control deficiencies is directed to those charged with governance because they are responsible for overseeing the financial reporting process and ensuring corrective actions are taken. This group, typically including the board of directors and the audit committee, has the authority and duty to oversee internal controls and to address any weaknesses shown by the audit. By reporting to governance, the auditor provides independent oversight and enables timely remediation, which governance can monitor and escalate as needed. Management is informed so they can fix the issues, but the formal report of deficiencies is directed to those charged with governance. Regulators or shareholders are not the standard recipients of these internal-control findings unless specific regulatory requirements apply.