Академический Документы
Профессиональный Документы
Культура Документы
Management Report
WRITING EFFECTIVE MANAGEMENT LETTER
MODULE OBJECTIVES:
1
Communication With Those
Charged With Governance
The objectives of the auditor in financial statements audit include:
2
Those Charged With Governance and
Management
Charged with Governance - - person(s) or organization(s) with
responsibility for overseeing the strategic direction of the
entity and obligations related to the accountability of the
entity.
2
Communication With Those
Charged With Governance
The auditor shall communicate in writing with those
charged with governance regarding significant findings
from the audit when, in the auditors professional
judgment, oral communication would not be adequate.
2
Communication With Those
Charged With Governance
3
Communication With Those
Charged With Governance
The auditor shall also communicate to management at an
appropriate level of responsibility on a timely basis:
4
Significant Deficiency in Internal Control
Exists when a control is designed, implemented or
operated in such a way that it is unable to prevent, or
detect and correct, misstatements in the financial
statements on a timely basis; or
5
Communicating Deficiency
in Internal Control
The auditor shall include in the written communication
of significant deficiencies in internal control:
5
Communicating Deficiency
in Internal Control
5
What Makes Audit Reports Successful?
Organization
Readability
Persuasiveness
Focused on Readers
Credibility
Materiality
6
Organization
All documents must be organized for complete and easy
comprehension
8
Readability. . . . contd.
Technical terms should be defined and acronyms should
be used sparingly
Clauses, phrases and modifiers should be used prudently
Words must be used correctly and precisely
Visual aids(i.e., graphs and charts) should assist easy
comprehension
9
Persuasiveness
Audit reports, should convince readers that the conclusions
presented are valid and acceptable and persuade them to
act on the recommendations
11
To write effective, attention-getting opening,
consider the following techniques:
State your audit conclusion directly
Write concretely and descriptively
Use terms your readers understand
Choose the information of greatest interest to your reader
Design your opening to guide the reader
12
THOUGHT PATTERN
AUDITORS LOGIC READERS LOGIC
What I did What is your conclusion?
13
State Your Audit Conclusion Directly
For example:
14
Write Concretely and Descriptively
Consider the following clich:
15
Use Terms Your Readers Understand
Esoteric or excessively technical language will turn
readers away as quickly as cliches described earlier
For example:
16
Choose the Information of Greatest
Interest to Your Reader
Varying your opening sentences to suit both the occasion
and the reader will make your reports more interesting and
more persuasive.
17
Elements of Reportable Audit Findings
18
Elements of Reportable Audit Findings
19
Starting with Condition or Result
Advantages:
Describing the condition in the first sentence draws your
reader into the narrative.
Disadvantages:
Some auditors find this approach too blunt. If the condition presents a
problem, this opening line will almost always be written in a negative
tone.
Appropriate Uses:
Starting with the conclusion is the most versa-tile form of organization. It
is the approach most readers expect and prefer.
20
Starting with Criteria
Advantages:
Describing the criteria in the first sentence overcomes the drawback of
beginning with the statement of a problem by using objective, factual
language.
Disadvantages:
There is seldom much exciting material in a policy or regulation, so this
opening may seem uninteresting. Some readers may think that the
writer is telling them what they already know.
Appropriate Use:
When your review is strictly to encourage compliance or when
regulations are extremely important, this approach is effective.
21
Starting with Cause
Advantages:
Describing the cause of the problem in the first sentence may point
the way to a solution. It focuses on the underlying problem, not the
symptoms.
Disadvantage:
If you have not carefully analyzed the situation, your identification of
cause may be perceived as judgmental or as a conclusion without facts
to support it.
Appropriate Use:
Begin with the cause when you have identified a fundamental
procedural weakness.
22
Starting with Effect
Advantages:
Describing the effect in the first sentence creates the strongest tone.
It shows the business significance of the situation, and grabs the
attention of senior management.
Disadvantages:
While the writer using this technique may impress senior
management, he or she will not win friends among line managers.
Used inappropriately, this technique can exaggerate the significance of
a finding.
Appropriate Use:
Significant findings can be presented effectively using this format.
The tone highlights its importance.
23
Starting with Recommendation
Advantages:
Describing the recommendation and its benefits in the first sentence uses
positive language and will soften the tone of the opening. It makes your
report more action-oriented, focusing on possible solution rather than
existing problems.
Disadvantage:
Readers may interpret the report as telling management what should be
done. The recommendation and benefit can be put together in one
sentence.
Appropriate Use:
Stressing recommendations and benefits can contribute to a
more positive, constructive tone in your reporting.
24
Choosing Your Strategic Opening
Soften the Use a
Decision Issue tone Stronger
Tone
How significant is the issue? Minor Major
25
Getting Results from Your Audit Report
You can strengthen your reports potential to get results
by taking the following steps:
Overcome objections
26
Examples of Management Reports Items
27
Basic Elements of Reportable Items
the nature of the item
the implications for the clients business
the suggested corrective action
the benefits of such action to the client
managements response to our suggestions
an agreed plan of action, if applicable, for
implementation
28
Basic Characteristics of Comments
on Internal Control
Constructive
Positive
Pro-active
Timely
30
Documentation of Management Report Points
31
Major Parts of Management Report
Cover and title page
Transmittal letter
Table of Contents
Body of the Report
- Observation and implications
- Recommendation(s)
- Benefit
- Management response
Appendices (if any)
32
Documentation for Orally Communicated
Management Report
Date(s) of meeting(s).
Management and audit committee members in attendance.
The specific matters brought to the clients attention.
Whether any matters were categorized as reportable
conditions or material weaknesses.
The clients responses.
33
WRITING EFFECTIVE MANAGEMENT REPORT
MODULE OBJECTIVES:
34