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[The following paragraph was effective for reviews of interim periods ending on or after November 15, 2004, for accelerated filers, and on or after July 15, 2005, for all other issuers. It was amended as a result of the adoption of Auditing Standard No. 5, effective for audits of fiscal years ending on or after November 15, 2007. See PCAOB Release 2007-005A.

Return to the current version.]

AU 722.33

When conducting a review of interim financial information, the accountant may become aware of matters relating to internal control that may be of interest to the audit committee. Matters that should be reported to the audit committee are referred to as significant deficiencies. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the company's ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the company's annual or interim financial statements that is more than inconsequential will not be prevented or detected.fn 22

Footnotes (AU Section 722 — Interim Financial Information):

fn 22 Section 325, Communications About Control Deficiencies in An Audit of Financial Statements, provides guidance on communicating reportable conditions related to internal control.

Copyright © 2002, American Institute of Certified Public Accountants, Inc.