ASA 260 - Communication With Those Charged With Governance - December 2015
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Scope of this Auditing Standard
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This Auditing Standard deals with the auditor’s responsibility to communicate with those charged with governance in an audit of a financial report. Although this Auditing Standard applies irrespective of an entity’s governance structure or size, particular considerations apply where all of those charged with governance are involved in managing an entity, and for listed entities. This Auditing Standard does not establish requirements regarding the auditor’s communication with an entity’s management or owners unless they are also charged with a governance role.
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This Auditing Standard is written in the context of an audit of the financial report, but may also be applicable, as necessary in the circumstances, to audits of other historical financial information when those charged with governance have a responsibility to oversee the preparation of the other historical financial information.
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Recognising the importance of effective two‑way communication in an audit of a financial report, this Auditing Standard provides an overarching framework for the auditor’s communication with those charged with governance, and identifies some specific matters to be communicated with them. Additional matters to be communicated, which complement the requirements of this Auditing Standard, are identified in other Australian Auditing Standards (see Appendix 1 of this Auditing Standard). In addition, ASA 265[1] establishes specific requirements regarding the communication of significant deficiencies in internal control the auditor has identified during the audit to those charged with governance. Further matters, not required by this or other Australian Auditing Standards, may be required to be communicated by law or regulation, by agreement with the entity, or by additional requirements applicable to the engagement. Nothing in this Auditing Standard precludes the auditor from communicating any other matters to those charged with governance. (Ref: Para. A33–A36)