ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reports to those charged with governance and management
Kestrel Retail plc is listed. In planning the audit, the engagement partner will communicate with the audit committee. Which item must the auditor communicate regarding independence for the audit of a listed entity under ISA 260?
For a listed entity, the auditor must tell those charged with governance that the engagement team, the firm and network firms have complied with relevant ethical requirements on independence, and must disclose relationships and other matters that may reasonably bear on independence, together with the safeguards applied.
- AA statement that the engagement team and the firm have complied with relevant ethical requirements regarding independenceCorrect
- BThe names of all audit staff and their personal investment portfolios
- CA guarantee that no threats to independence could ever arise in future years
- DA statement of the audit fee to be charged to competitors of the entity
Explanation
For listed entities, ISA 260 requires a statement that the team, firm and network firms have complied with relevant ethical requirements on independence, plus communication of relationships and other matters that may reasonably bear on independence and related safeguards. A guarantee about the future is not possible, and personal portfolio details are not required.
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