Reports to those charged with governance and management

In this lesson

1. 0:00 Reporting to governance and management
2. 0:15 Understanding those charged with governance
3. 0:44 Management's role in day-to-day operations
4. 1:11 Key audit matters to communicate
5. 1:48 Identifying internal control deficiencies
6. 2:42 Management letter structure and content
7. 3:36 Caveat on reported control weaknesses

About this lesson

You'll discover the distinction between these two groups, what matters must be reported to each, and how to structure management letters that identify control deficiencies, explain their consequences, and recommend practical improvements. This is essential knowledge for the Audit and Assurance module and reflects real-world audit practice. The video covers who "those charged with governance" and management are within an organisation. Those charged with governance are the most senior strategic decision-makers—typically executive and non-executive directors, plus audit committees where they exist. Management handle day-to-day operations, though in smaller entities these roles may overlap. Understanding this distinction matters because different matters must be communicated to each group in compliance with auditing standards. You'll learn what specific matters auditors must communicate: the scope and timing of the audit, significant findings, auditor independence confirmation, and any expected modifications to the audit report. Equally important is reporting internal control deficiencies—weaknesses in design or operation that the audit has uncovered. The video walks you through structuring management letters effectively: identify each deficiency, explain its consequence (the "so what?"), and propose practical recommendations to address it. A caveat should clarify that you're reporting only those matters deemed significant enough to warrant attention, not necessarily every weakness identified. This understanding directly supports your Audit and Assurance studies and prepares you for real audit scenarios where clear, structured communication with stakeholders builds confidence and drives genuine improvement.

Duration: 4m