SA – 260 : Communication with those charged with Governance

The auditor shall communicate with those charged with governance and if there exist any Audit Committee or supervisory board, the auditor shall communicate the matter to them.

Reporting Non-compliance in the Auditor’s Report on Financial Statements

  • The auditor shall express a qualified or adverse opinion on the financial statements in case of non-compliance.
  • If he is precluded from obtaining sufficient appropriate audit evidence, the auditor shall express a qualified opinion or disclaim an opinion.
  • If he is unable to determine as to how exactly non-compliance has occurred, he shall evaluate the effect on auditor’s opinion in accordance with proposed SA 705.

Reporting Non-compliance to Regulatory and Enforcement Authorities

The auditor has to determine whether he has the responsibility to report the identified or suspected non-compliance to parties outside the entity.

Documentation

  • Copies of records or documents relating to identified or suspected non-compliance.
  • Minutes of discussions with management and those charged with governance or parties outside the entity.