Contents and formats of internal audit reports - Internal audit

9.2. Contents and formats of internal audit reports

In all cases of internal audit, a written report on the results of the internal audit should be prepared and provided to the management. In the course of internal audit implementation, auditors can prepare and communicate in-person or in writing interim information. The data contained in the auditor's written report is necessary for the management of the audited entity in order to have an idea of ​​those deficiencies in the accounting records, accounting registers and internal control system that may lead to significant errors in the financial statements.

In addition, the written report contains constructive proposals for improving the accounting system and internal control of the audited entity.

In case of an initiative audit, if an audit organization is involved in the performance of internal audit functions, a written report is also prepared and submitted to the management of the audited entity in cases where:

1) the contract for an initiative audit on the results of the audit provides for the preparation of the auditor's report;

2) the contract for an initiative audit provides for the preparation of the auditor's written opinion rather than the preparation of the auditor's report.

The audit organization is required to indicate in the auditor's written report all errors and distortions related to the facts of the economic life of the economic entity that have or can have a significant impact on the reliability of its financial statements. In addition, any information related to the audit and the facts of the economic life of the economic entity that the auditor considers appropriate may be provided in the auditor's written report.

The auditor's written report can not be considered as a full account of all the existing shortcomings, since it indicates only those that were found during the audit.

The auditor's written report is prepared in the course of an audit and is submitted to the head and (or) the owner of the economic entity subject to audit, at the final stage of the audit. A written report is a confidential document and can be transmitted only:

o to the person who signed the contract (contract, letter on the audit) for the provision of audit services;

o to the person who is directly indicated as the recipient of the auditor's written report in the contract (contract, letter on conducting the audit) for the provision of audit services;

o any other person in the case of a written indication to the auditor organization of the person who signed the contract (contract, letter on the audit) for the provision of audit services.

Certain issues of the auditor's written report may be discussed orally or through an exchange of letters with employees of the audited entity during its audit, taking into account the degree of responsibility, access to information and the level of competence of these employees.

For example, if the fact of failure to submit any documents to the auditor based on the results of the procedure for verifying the completeness of the primary documents for a particular section (section) is recorded in the auditor's written report, the employees of the audited person will not be able to take timely actions on their finding. If duplicates of these documents are subsequently received, then the auditor will have to change his conclusions, calculations, written report, etc. That is why the letter on the need to obtain duplicates of primary documents should be sent to the management of accounting in the course of the audit. If such documents are not submitted before the end of work of the auditors for collection of audit evidence, then the fact of the absence of separate documents will be reflected again in a written report.

All incoming and outgoing written documents of this kind should be attached to their other working documentation without fail.

Based on the results of the audit, in consultation with the management of the audited entity, a preliminary version of the auditor's written report may be prepared. The preliminary version of the written report can be transferred only to those persons who are represented and are definitive! "; option.

The preliminary version of the auditor's written report may contain requirements for the introduction (with the implementation of the rules established for this rule) of corrections to accounting data and the preparation of a list of clarifications to the already prepared financial statements. Fulfillment of such requirements in case they concern substantive corrections is obligatory for the auditing organization to subsequently submit to the audited person a positive audit report.

The management of the audited entity may:

o prepare a written response to the preliminary version of the auditor's written report reflecting the viewpoint of the audited entity to the comments contained in the version of this document;

o meet with the auditors who conducted the audit, inviting from their side those whom they deem necessary to discuss the draft version of the document.

The final version of the auditor's written report must be prepared and submitted to the management of the audited entity no later than the audit report.

Comments of the audited entity are taken by the audit firm, if the auditors deem it necessary.

If the preliminary version of the auditor's written report contains remarks that are significant, the final version of the written report should be evaluated and analyzed by corrections made by employees of the audited entity in accordance with the requirements of the auditors.

In accordance with the United States auditing rule (standard), "Auditor's actions in detecting misstatements of financial statements", and Federal Standard No. 13 "Auditor's duties to review errors and unfair actions during the audit" The auditor organization found in the course of audit of the facts of distortions of the accounting reports should reflect in detail in the working documentation.

In addition, information about the detected distortions should be included in the auditor's written report to the management of the audited entity, and if the violations are not rectified, then in the audit report on the financial statements.

Having examined the preliminary version of the auditor's written report, the management of the audited entity may decide to make corrections to the financial statements.

It should be remembered that, although the written information of the auditor contains the final figures of adjusting the articles of accounting, it is not enough to make corrections only in the reporting forms. Corrections are considered to be made only if they are made in the accounting records - accounting documents for making corrections have been made, accounting records have been made, new registers of analytical and synthetic accounting have been created, and accounting reports have been compiled.

In order to ensure that the audit firm is convinced that the necessary corrections of significant breaches in accounting have been made, the audited entity must submit to it not only a new version of the financial statements, but also a turnover balance sheet or another accounting register on the basis of which the organization makes a balance, as well as a list of corrective accounting records.

In accordance with the federal auditing standards governing the preparation and issuance of an audit report on accounting (financial) reporting, if, as a result of an audit, the audited entity has made the necessary amendments to the financial statements before submission to all interested users, the audit report should not contain an indication of these amendments.

If an audit occurs after reporting to interested users, then in the event of a material error or irregularity in the financial statements before the corrections, the audit organization should submit an audit report different from the modified one.

The written information of the auditor (preliminary and final versions) is compiled in at least two copies. One copy of the written information will be handed over to the receipt only to those persons who can be provided with this information in accordance with the requirements of the United States auditing standard, the second copy remains at the disposal of the audit firm and is attached to other working documents of the auditor. Disagreement of the recipient of the written information of the auditor with the content of its final version can not serve as a ground for refusal to receive the named document.

In consultation with the recipient, the written information of the auditor can be mailed or otherwise. In this case, during archival storage in an audit organization, documents confirming the fact of a mailing or other method of transferring written information to the second copy of the auditor's written information are attached.

The written information of the auditor is a confidential document. The information contained in it is not subject to disclosure by the audit firm, all employees or an independent auditor, with the exception of cases expressly provided for by federal laws of the United States.

The economic entity is entitled to dispose of information contained in the auditor's written information, at its discretion. The audit organization is not responsible for the disclosure of confidential information that occurred due to the fault or with the knowledge of the employees of the audited entity.

In the event of a change in the audit organization, the management of the audited entity is required to submit to the new audit organization copies of written information based on the results of the audits for at least three previous financial years prepared by the former audit organization (audit organizations). The new audit organization is obliged to observe the confidentiality of information contained in documents prepared by the former audit organization (audit organizations).

The recommended form of written information of the auditor is:

Report to the management of internal audit results

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