Skip to content

ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reports to those charged with governance and management

During the audit of Zenith Foods Ltd, the audit senior notes that the audit team has found no significant difficulties and no uncorrected misstatements. The engagement partner proposes to skip any communication with those charged with governance (TCWG) because 'there is nothing to report'. Which view is correct under ISA 260 (Revised)?

Communication with TCWG is still required. ISA 260 obliges the auditor to communicate their responsibilities, the planned scope and timing of the audit, and significant findings, whether or not problems arose. It is not limited to control deficiencies, listed entities, or situations where TCWG ask for it.

  1. ACommunication is only required if the auditor has identified significant deficiencies in internal control
  2. BCommunication is still required, because the auditor must tell TCWG about the planned scope and timing of the audit and their responsibilities, and significant findingsCorrect
  3. CCommunication is required only for listed entities, so no communication is needed for Zenith Foods Ltd
  4. DCommunication is optional and is only required where TCWG request it in writing

Explanation

ISA 260 requires the auditor to communicate the auditor's responsibilities, the planned scope and timing of the audit, and significant findings from the audit. This applies regardless of whether problems were found. The option limiting communication to control deficiencies confuses ISA 260 with ISA 265.

Did you get it right without looking?

One question tells you little. A timed set on Reports to those charged with governance and management shows your real accuracy, how long you take and where you lose marks.

Practise Reports to those charged with governance and managementFree diagnostic mock

More Reports to those charged with governance and management questions