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Accounting Firms Are Very Concerned That Their Employees Have Excellent Communication Skills

Accounting firms require excellent communication skills, both oral and written, from their employees because such skills are essential in all three conceptual phases of auditing: (1) audit planning, (2) tests of controls, and (3) substantive testing. In each phase, clear communication is needed to understand the client environment, document procedures and findings, and convey results.

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28 views2 pages

Accounting Firms Are Very Concerned That Their Employees Have Excellent Communication Skills

Accounting firms require excellent communication skills, both oral and written, from their employees because such skills are essential in all three conceptual phases of auditing: (1) audit planning, (2) tests of controls, and (3) substantive testing. In each phase, clear communication is needed to understand the client environment, document procedures and findings, and convey results.

Uploaded by

Red Hub
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Accounting firms are very concerned that their employees have excellent communication skills, both

oral and written.

Explain why this requirement is so important by giving examples of where these skills would be
necessary in each of the Conceptual phases of auditing that are.,

1. Audit planning
2. Tests of controls
3. Substantive testing

Answer –

Excellent communication skills, both oral and written, are of paramount importance in each of the
conceptual phases of auditing. Let's explore why these skills are crucial in each phase and provide
examples:

1. Audit Planning:
During the audit planning phase, effective communication ensures that all parties understand the audit's
scope, objectives, and expectations. Here are some examples where communication skills are necessary:

Client Discussions: Auditors need to engage in discussions with the client to gather information about
the business, industry, significant transactions, and potential risks. Clear and open communication helps
build rapport and ensures that the audit plan is tailored to the client's specific circumstances.

Setting Expectations: The audit team needs to communicate to the client the timelines, required
documents, and the overall audit process. This helps manage the client's expectations and ensures a
smooth audit engagement.

2. Tests of Controls:
In the phase of testing controls, communication skills are essential for understanding the client's internal
control environment and for assessing its effectiveness. Examples include:

Interviews: Auditors conduct interviews with company personnel to assess the design and operating
effectiveness of internal controls. Effective oral communication is crucial to ask probing questions and
comprehend the intricacies of the control procedures.

Documentation: Auditors must document the results of tests of controls, including any control
deficiencies or weaknesses. Clear and accurate written communication is essential for documenting the
testing procedures, findings, and recommendations.
3. Substantive Testing:
Substantive testing involves gathering evidence to support the accuracy of the financial statements.
Communication skills are vital in various aspects of this phase:

Data Analysis: Auditors need to communicate with the client's finance team to obtain the necessary
data for substantive testing. Clear communication ensures that the correct data is provided, and any
discrepancies are resolved.

Workpaper Preparation: Strong written communication skills are required to document the substantive
testing procedures, results, and conclusions. Well-organized workpapers make it easier for other team
members and reviewers to understand the testing performed.

In summary, effective communication skills are essential throughout all phases of an audit. They facilitate
collaboration with the client, ensure accurate documentation of procedures and findings, and enable the
audit team to convey the results clearly in reports and discussions.

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