There have been some changes brought within the auditing system. Recapping what has been stated by “Office of Auditors” (2007) website states that the “SAS NO. 112 will affect every audit of a local entity of accounting whether conducted by the Office of the State Auditor or a CPA firm. Many government audits performed by Government Auditing Standards issued by the Government Accountability Office (GAO). The GAO has incorporated the same definitions for significant deficiency and material weakness as SAS NO. 112.”
The SAS 112 has superseded SAS 60. SAS 112 means that within auditing communication of these changes to a different representative within the company is an important task to complete to make sure the audits run successfully. All changes under the SAS 112 should allow communication to all accounting and finance staff. The changes also need to be discussed with top management, internal auditors, stock keepers, and cashiers. The change in terms reportable condition to significant deficiency and material weakness are the main points in SAS 112 that need to be addressed. The term material weakness once only communicated now has to submit changes in writing. The term reportable condition is known now as the term significant deficiency. Also, significant deficiency has to be reported in writing. These are significant challenges in communicating.
The relevant groups to whom this change should report are internal auditors, accountant, control report users, and financial managers. The SAS 112 requires writing, but there are issues that arise in this form of communication. Sending a written communication fulfills a legal requirement but does not ensure that the person receiving the communication has learned the contents of the communication. Simple communication requirements like clarifying, thinking or expressing surprise are not possible. It is not practicability to immediately express dissatisfaction or criticize such written communication. It is a top-down...