Page 35 - CA Final PARAM Digital Book.

Part 3- SA 260

QNO Matters to be Communicated to TCWG New Course – (SM23)
24.040 TITANIUM CNO-- SA260.120
UVW & Associates are the statutory auditors of Moon Ltd., a listed company, for the financial year 2022-

23. CA Udhav is the engagement partner for the audit assignment. He was of the understanding that as
per the requirement of one of the SAs he has a responsibility to communicate following matters to those
charged with governance:
(a) The auditor’s responsibilities in relation to the financial statement audit.
(b) Planned scope and timing of the audit.
(c) Auditor independence
Which of the matters is not included in the list prepared by CA Udhav. Discuss such matter in detail.
Answer SA 260 “Communication with Those Charged with Governance” deals with auditor’s responsibility to
communicate with those charged with governance in relation to an audit of financial statements. Among

various matters as included by CA Udhav in his list, one of the matters that is not mentioned in the list is
Significant findings from the audit. With respect to such matter, the auditor shall communicate with those
charged with governance: -

(a) The auditor’s views about significant qualitative aspects of the entity’s accounting practices, including
accounting policies, accounting estimates and financial statement disclosures. When applicable, the
auditor shall explain to those charged with governance why the auditor considers a significant
accounting practice, that is acceptable under the applicable financial reporting framework, not to be
most appropriate to the particular circumstances of the entity;

(b) Significant difficulties, if any, encountered during the audit;

(c) Unless all of those charged with governance are involved in managing the entity: -
(i) Significant matters arising during the audit that were discussed, or subject to correspondence,
with management;
(ii) Written representations the auditor is requesting.

(d) Circumstances that affect the form and content of the auditor’s report, if any and

(e) Any other significant matters arising during the audit that, in the auditor’s professional judgment, are
relevant to the oversight of the financial reporting process.

The communication of findings from the audit may include requesting further information from those
charged with governance in order to complete the audit evidence obtained. For example, the auditor may
confirm that those charged with governance have the same understanding of the facts and circumstances
relevant to specific transactions or events.

QNO Communication of Independence New Course – (SM23)
24.045 TITANIUM CNO-- SA260.200

CA. Shelly Goel is offered appointment as auditor of RUTE Limited, a listed company. The audit committee
of the company wants her to justify independence in relation to company through proper communication.
Although she has ensured that there are no threats to her independence, she feels requirement of audit
committee to be beyond its purview. What is your opinion in this regard?
Answer

As required in SA 260, in the case of listed entities, the auditor shall communicate with those charged with
governance: -

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