Guidance for audit committees
The Combined Code on Corporate Governance July 2003
C.3 Audit Committee and Auditors
Main Principle: The board should establish formal and transparent arrangements for considering
AU-C 265 Examples of Circumstances That May Be Deficiencies, Significant
Deficiencies, or Material Weaknesses
Items noted in BLUE are changes from AICPAs Clarity Standards AU-C 265s (SAS No.
122) predecessor, SAS No. 115 (AU-325).
AU-C 265.A11 includes a
Note: For ease of understanding we have divided this chapter into two sections, the first being the
theory of sampling (learning objectives 1 to 6), the second a more detailed consideration of current
CONTINUOUS CASE STUDY: ADELPHI HEALTH CARE LTD
The preliminary analytical review below is based on comparisons between 2010 and 2011 and
calculations of key ratios.
The results of ratios are as follows:
Tests of controls
9.1 Understand that tests of controls are undertaken when the auditor intends to rely on a control to
reduce a risk of material misstatement.
9.2 Appreciate that when undertaking tests of controls, the audit
Completion and review
12.1 Explain the significance of the date of the auditors report and the audit engagement.
12.2 Define subsequent events of audit interest and describe the audit procedures applied specifically