Document ID: chunk:federal_register_of_legislation:F2023C01118:body:0:p52
Version: federal_register_of_legislation:F2023C01118
Segment Type: other
Provision Reference: 
Character Range: 153183–156268

has responded to emerging developments and changes in the circumstances of the firm or its engagements, including how the system of quality management has been adapted to respond to such changes.

           * The relationship between the firm and the network, the overall structure of the network, a description of network requirements and network services, the responsibilities of the firm and the network (including that the firm is ultimately responsible for the system of quality management), and information about the overall scope and results of network monitoring activities across the network firms.

Communication with Those Charged with Governance (Ref. Para: 34(e)(i))

A127.      How the communication with those charged with governance is undertaken (i.e., by the firm or the engagement team) may depend on the firm's policies or procedures and the circumstances of the engagement.

A128.      ASA 260 deals with the auditor's responsibility to communicate with those charged with governance in an audit of a financial report, and addresses the auditor's determination of the appropriate person(s) within the entity's governance structure with whom to communicate[19] and the communication process.[20] In some circumstances, it may be appropriate to communicate with those charged with governance of entities other than listed entities (or when performing other engagements), for example, entities that may have public interest or public accountability characteristics, such as:

           * Entities that hold a significant amount of assets in a fiduciary capacity for a large number of stakeholders including financial institutions, such as certain banks, insurance companies, and superannuation funds.

           * Entities with a high public profile, or whose management or owners have a high public profile.

           * Entities with a large number and wide range of stakeholders.

Public sector considerations

A129.      The firm may determine it is appropriate to communicate to those charged with governance of a public sector entity about how the firm's system of quality management supports the consistent performance of quality engagements, taking into account the size and complexity of the public sector entity, the range of its stakeholders, the nature of the services it provides, and the role and responsibilities of those charged with governance.

Determining When it is Otherwise Appropriate to Communicate with External Parties (Ref. Para: 34(e)(ii))

A130.      The firm's determination of when it is appropriate to communicate with external parties about the firm's system of quality management is a matter of professional judgement and may be influenced by matters such as:

           * The types of engagements performed by the firm, and the types of entities for which such engagements are undertaken.

           * The nature and circumstances of the firm.

           * The nature of the firm's operating environment, such as customary business practice in the firm's jurisdiction and the characteristics of the financial markets in which