The auditor communicates significant deficiencies, individually or in combination, in writing to those charged with governance. Other deficiencies are usually communicated in the management letter.
Source: BDS 265
Related terms
Internal controlProcesses and controls designed by management to provide reasonable assurance regarding the effectiveness of operations, the reliability of financial reporting and compliance with laws and regulations.Management letterA document in which the auditor communicates to management in writing the internal control deficiencies identified during the audit and recommendations for improvement.Those charged with governanceThe persons or bodies responsible for overseeing the strategic direction of the entity and its accountability obligations; in most companies the board and the audit committee.Adverse opinionThe opinion in which the auditor states that the financial statements are not presented fairly, where misstatements are both material and pervasive.Agreed-upon proceduresAn engagement in which the practitioner performs procedures agreed with the entity and, where relevant, a third party, and reports only the findings without providing assurance.Analytical proceduresThe evaluation of financial information through analysis of plausible relationships among financial and non-financial data.
Last updated: November 8, 2026 · This definition is for general information only.