1. Learning Objectives LO1 Prepare reports for review and compilation of unaudited financial statements, given specific facts. LO2 Write a report on a review of interim financial information. LO3 Describe the various reports on internal control and their connection with public reporting and reporting to a client’s audit committee. 1

2. Public and Restricted Reports Several different kinds of public and restricted use reports on control have evolved in practice.  Guidance is provided for some restricted use reports.  Public reports have little authoritative guidance in Canada.  The scope of controls to be covered in a public report is an issue.  Accounting / operational / management LO3 2

3. Public and Restricted Reports In order to evaluate controls, a systems criteria for control is required.  CICA issued Guidance on Criteria of Control (COCO).  20 control criteria are identified.  COCO committee has also issued Guidance for Directors – Governance.  Sarbanes-Oxley requires companies to issue audited reports on control. LO3 3

4. Audit Reports on Internal Control SOX added an internal control statement to the financial statements, as in exhibit 17-11.  The auditor verifies the accuracy of the internal controls statement.  The auditor’s report is provided in exhibit 17-12. LO3 4

5. Other Communication on Control and Other Matters Auditing standards require auditors to report any reportable matters they encounter.  Report is to be addressed to the board or audit committee.  Reportable matters include significant control deficiencies.  The auditor may also communicate other matters, including control matters to management in a management letter.  This is considered as part of the audit, and not as a separate consulting engagement. LO3 5