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Auditing Standard ASA 540 Auditing Accounting Estimates and Related Disclosures
Communication with Those Charged With GoCommunication with Those Charged With Governance, Management, or Other Relevant Parties
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Communication with Those Charged With Governance, Management, or Other Relevant Parties
- In applying ASA 260[28] and ASA 265,[29] the auditor is required to communicate with those charged with governance or management about certain matters, including significant qualitative aspects of the entity’s accounting practices and significant deficiencies in internal control, respectively. In doing so, the auditor shall consider the matters, if any, to communicate regarding accounting estimates and take into account whether the reasons given to the risks of material misstatement relate to estimation uncertainty, or the effects of complexity, subjectivity or other inherent risk factors in making accounting estimates and related disclosures. In addition, in certain circumstances, the auditor is required by law or regulation to communicate about certain matters with other relevant parties, such as regulators or prudential supervisors. (Ref: Para. A146–A148)