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Certified Problem and Change Manager (CPCM)

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In identifying matters for communication with those charged with governance, an auditor most likely would
ask management whether:
A. There were any subsequent events of which the auditor was unaware.
B. It consulted with another CPA firm about accounting matters.
C. The turnover in the accounting department was unusually high.
D. It agreed with the auditor's assessed level of control risk.
Answer: B
Choice "B" is correct. The auditor is required to communicate to those charged with governance regarding
certain matters, including management consultation with other auditors. Consequently, the auditor must
ask management about this matter.
Choice "A" is incorrect. Unusually high turnover in the accounting department is a negative factor in
assessing control risk, but it is not a matter that needs to be communicated to those charged with
Choice "C" is incorrect. Inquiry of management concerning any subsequent events of which the auditor is
unaware is a required audit procedure, which would also be confirmed as part of the management
representation letter, but it is not a matter that needs to be communicated to those charged with
governance. (They should already know!)
Choice "D" is incorrect. The auditor alone has responsibility for judgments regarding the assessed level of
control risk, and the auditor would not generally discuss this assessment with management.

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