Document ID: chunk:federal_register_of_legislation:F2021C01264:body:0:p9
Version: federal_register_of_legislation:F2021C01264
Segment Type: other
Provision Reference: 
Character Range: 24087–27139

issue the written communication at a later date.  Nevertheless, in the latter case, as the auditor's written communication of significant deficiencies forms part of the final audit file, the written communication is subject to the overriding requirement[7] for the auditor to complete the assembly of the final audit file on a timely basis.  ASA 230 states that an appropriate time limit within which to complete the assembly of the final audit file is ordinarily not more than 60 days after the date of the auditor's report.[8]

A14.         Regardless of the timing of the written communication of significant deficiencies, the auditor may communicate these orally in the first instance to management and, when appropriate, to those charged with governance to assist them in taking timely remedial action to minimise the risks of material misstatement.  Doing so, however, does not relieve the auditor of the responsibility to communicate the significant deficiencies in writing, as this Auditing Standard requires.

A15.         The level of detail at which to communicate significant deficiencies is a matter of the auditor's professional judgement in the circumstances.  Factors that the auditor may consider in determining an appropriate level of detail for the communication include, for example:

           * The nature of the entity.  For instance, the communication required for a public interest entity may be different from that for a non‑public interest entity.

           * The size and complexity of the entity.  For instance, the communication required for a complex entity may be different from that for an entity operating a simple business.

           * The nature of significant deficiencies that the auditor has identified.

           * The entity's governance composition.  For instance, more detail may be needed if those charged with governance include members who do not have significant experience in the entity's industry or in the affected areas.

           * Legal or regulatory requirements regarding the communication of specific types of deficiency in internal control.

A16.         Management and those charged with governance may already be aware of significant deficiencies that the auditor has identified during the audit and may have chosen not to remedy them because of cost or other considerations.  The responsibility for evaluating the costs and benefits of implementing remedial action rests with management and those charged with governance.  Accordingly, the requirement in paragraph 9 applies regardless of cost or other considerations that management and those charged with governance may consider relevant in determining whether to remedy such deficiencies.

A17.         The fact that the auditor communicated a significant deficiency to those charged with governance and management in a previous audit does not eliminate the need for the auditor to repeat the communication if remedial action has not yet been taken.  If a previously communicated significant deficiency remains, the current year's