June 27, 2007
Thanks for giving us the possibility to submit comments about the definition of significant deficiency: it will be very useful in order to better identify what is worth of attention in the audit process and what is not.
In my opinion I think that the definition of significant deficiency should be strong enough to ensure convergence of Internal Auditors, External Auditors, Management and, last but not least, the Financial Analyst community, that are called to give their evaluations about the fair value of the shares.
With this last consideration, I propose this very short definition:
Significant deficiency: a control weakness that could hinder a true and fair exhibition of financial results
With this kind of consideration, all internal and external actors will probably align on the necessity to identify if a significant deficiency in controls could damage the fair value of the stocks, held by investors, that should be the main purpose of internal and external audit.