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 company has a board of directors, an audit committee and a separate group of non-executive directors. The audit manager asks which party the auditor should normally communicate with under ISA 260 (Revised). Which approach is most appropriate?

The auditor should communicate with those charged with governance, such as the audit committee or board, who oversee strategic direction and accountability. Management alone, such as the finance director, is insufficient because it is not the oversight body, so the auditor identifies and agrees the appropriate governance contacts.

1. ACommunicate only with the finance director because the finance director prepares the financial statements
2. BCommunicate with the person or persons with responsibility for overseeing strategic direction and accountability, such as the audit committee or board, as agreed with themCorrect
3. CCommunicate only with the shareholders at the annual general meeting
4. DCommunicate only with the internal audit department, as it reports on controls