Page 37 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
SA 705: The auditor is required to communicate with governance when planning to modify the opinion in the
auditor's report as per SA 705.
SA 706: When the auditor feels the need to include an Emphasis of Matter or Other Matter paragraph as per SA
706, or when required by other SAs, communication with governance is mandated.
SA 720: In case of an uncorrected material misstatement of the other information as per SA 720, the auditor
should communicate with governance.

(CNO-SA260.200) Communication of Auditor’s Independence in Case of Listed Entities
Ethical & Independent: The auditor must affirm that the engagement team, the firm, and relevant network
firms have adhered to necessary ethical requirements concerning independence.
Relationship Disclosure: The auditor should disclose all relationships and matters between the firm, network
firms, and the entity that could impact independence, as per their professional judgment.
Fee Transparency: This includes the total fees charged during the period for both audit and non-audit services
provided by the firm and network firms. The fees should be broken down into categories that help the
governance evaluate the effect of these services on auditor independence.
Safeguards: The related safeguards that have been applied to eliminate identified threats to independence or
reduce them to an acceptable level

(CNO-SA260.220) The Communication process
1. Communication Form and Timing: The auditor is required to discuss with the governance team the form,
timing, and general content of audit communications.
2A. Significant Audit Findings: The auditor shall communicate in writing with those charged with governance
regarding significant findings from the audit if, in the auditor’s professional judgment, oral communication
would not be adequate.
2B. Auditor Independence: In cases involving listed entities, auditor's independence issues must be
communicated in writing to those charged with governance.
2C. Not all audit matters: Not all audit matters need to be included in these written communications.
3. Timeliness: All communications from the auditor to the governance team should be made in a timely manner.

(CNO-SA260.240) Adequacy of the communication process
Assess adequacy: Auditor assesses the adequacy of two-way communication with those charged with
governance.
Inadequate Communication: If communication is inadequate, auditor evaluates its effect on the auditor’s
assessment of the risks of material misstatement. and ability to obtain sufficient appropriate audit evidence, and
shall take appropriate action.

(CNO-SA260.260) Documentation
Oral Communication: The auditor should document matters communicated orally, including when and to
whom they were communicated, as per SA 260.
Written Communication: A copy of written communication must be retained by the auditor as part of the
audit documentation.

NOTE: 2 CNO’s (CNO-SA260.280) & (CNO-SA260.300) of SA 260 are Covered along with Chapter 7.

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