SA 260 requires the auditor to communicate, to those charged with governance, the auditor's responsibilities regarding the audit, the planned scope and timing, significant findings from the audit, and — where the entity is a listed entity or otherwise required — a statement on compliance with independence requirements, including any relationships that might reasonably be thought to affect independence and the safeguards applied. This is a two-way requirement: the auditor must also obtain information relevant to the audit from those charged with governance, such as whether they are aware of actual or suspected fraud.
What 'significant findings' specifically includes
- The auditor's views on significant qualitative aspects of accounting practices, including accounting policies and estimates
- Significant difficulties encountered during the audit, such as unavailability of expected information or restrictions on access
- Significant matters discussed, or subject to correspondence, with management
- Written representations the auditor is requesting
- Circumstances affecting the form and content of the auditor's report, where relevant
- Any other significant matters arising from the audit that are relevant to those charged with governance overseeing the financial reporting process
Form and timing
| Matter | Required form | Timing |
|---|---|---|
| Planned scope and timing of the audit | Oral or written, auditor's judgment | Early enough to be useful for governance's own oversight planning |
| Significant findings from the audit | Oral or written, but written if oral communication would not be adequate | On a timely basis, before the report is finalised |
| Auditor independence statement (where required) | Written | Before the report is issued |
Regulatory requirement
Where all of those charged with governance are involved in managing the entity (common in smaller, owner-managed companies), SA 260's communication requirements still apply, but the standard allows adapting the form — a separate formal communication may add little where the same individuals already know the matters as managers; what still has to happen is that governance-relevant matters are documented as having been communicated.
SA 260 requires evaluating whether the two-way communication has itself been adequate for the audit — if those charged with governance are unresponsive or the communication appears one-sided, that is itself a matter the auditor needs to consider the implications of, not simply note and move past.
This is practical guidance written for audit teams, not an authoritative statement of any standard or statute. Standards, forms and timelines change. Check the current text issued by the ICAI and the relevant authority before relying on anything here in an audit file.
Related resources
- Audit documentationSA 265: communicating internal control deficiencies to those charged with governanceMentioning a control gap in the closing meeting is not the SA 265 communication. A significant deficiency has to go to those charged with governance in writing.
- Audit workflow & automationSA 700: forming an opinion, and what "true and fair" actually requires concluding onFinishing every planned procedure isn't the same as forming an opinion. SA 700 is the step that happens after the checklist, not instead of it.
- Audit documentationEngagement letters: what SA 210 requiresWhat an engagement letter must establish, when it needs renewing, and the gaps most often found on file inspection — undated letters and stale scope.
- Audit documentationReviewing and signing off audit working papersWhat a reviewer is responsible for, a defensible review order, writing points that get cleared properly, and why approval must lapse when the paper changes.
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