Accounting Auditing

Noura Ibrahim Badawi

Hollinger International

REQUIRED

[3] The following requirements relate to Ms. Stitt's testimony about the audit committee presentation:

[a] Provide a brief overview of the requirements of AU Section 380, The Auditor's Communication with Those Charged with Governance. Be sure to describe the overall purpose of this required communication.

[b] Based on your overview of the auditor's communication responsibilities, why was it appropriate for KPMG to discuss the related party transactions with Hollinger International's Audit Committee?

[c] Based on your review of the transcript about the audit committee meeting, describe whether you believe KPMG exercised due professional care in pursuing this issue with Hollinger International's Audit Committee. Did KPMG accomplish the intent of AU Section 380? What could KPMG have done differently with respect to this issue during this meeting?

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[a]

This section provides guidance on the auditor's communication with those charged with governance in relation to an audit of financial statements. Those charged with governance means the person(s) with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity. This includes overseeing the financial reporting process. This section establish requirements concerning the auditor's communication only with an entity's management or owners who are also charged with a governance

role. In this case the communication took place between the auditor (KPGM) and the Audit Committee and management of Hollinger International regarding the annual report in order to discuss matters that related to the financial statement.

The purpose of this required communication is to: a. Communicate clearly with those charged with governance the responsibilities of the auditor in relation to the financial statement audit, and an overview of the...