A letter issued on significant deficiencies relating to an entity's internal control observed during an audit of the financial statements of a nonissuer should include a:

Question

Quizplus · Accepted Answer

Choice "A" is correct. Any report issued on significant deficiencies noted during an audit should (1) indicate that the purpose of the audit was to report on the financial statements and not to provide assurance on internal control, (2) include the definition of significant deficiencies, and (3) include a restriction on the use of the report. Choice "B" is incorrect. Because the auditor does not search for material weaknesses, a description of tests performed in this regard would not be included in a written report. Choice "C" is incorrect. There is no required statement of compliance with applicable laws and regulations in a letter issued on significant deficiencies. Choice "D" is incorrect. There is no paragraph describing management's evaluation in a letter issued on significant deficiencies.

A Letter Issued on Significant Deficiencies Relating to an Entity's