ACCA AA Syllabus C. Internal Control - Management Letters - Notes 2 / 3
The aim of the letter to management is to ensure the audit runs smoothly and to highlight weaknesses and problems
Matters which should be included are:
Weaknesses in internal controls
Failures by staff to adhere to proper procedures
Any efficiencies which could be made
Any other specific issues
Often times the auditor does not sufficiently communicate these matters and such problems include:
No outline of weaknesses in internal controls or assessment of potential effects
No assessment of the cost of implementation of recommendations
Lack of recognition of clients experience in running their own business
‘Rubbing management up the wrong way’ with wide ranging suggestions.
The report to management takes the form of either a formal report or a letter
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Communication with those charged with governance
Communicate matters of audit importance
Management letter - see above
Specific internal control issues