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PSA-265 - Auditing and Assurance Standards Council...

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Philippine Standard on Auditing 265 COMMUNICATING DEFICIENCIES IN INTERNAL CONTROL TO THOSE CHARGED WITH GOVERNANCE AND MANAGEMENT Conforming Amendments to Other Standards Auditing and Assurance Standards Council
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PSA 265 2 PHILIPPINE STANDARD ON AUDITING 265 COMMUNICATING DEFICIENCIES IN INTERNAL CONTROL TO THOSE CHARGED WITH GOVERNANCE AND MANAGEMENT (Effective for audits of financial statements for periods beginning on or after December 15, 2009) CONTENTS Paragraph Introduction Scope of this PSA .................................................................................................... 1-3 Effective Date .......................................................................................................... 4 Objective ................................................................................................................. 5 Definitions ............................................................................................................... 6 Requirements .......................................................................................................... 7-11 Application and Other Explanatory Material Determination of Whether Deficiencies in Internal Control Have Been Identified A1-A4 Significant Deficiencies in Internal Control ........................................................... A5-A11 Communication of Deficiencies in Internal Control .............................................. A12-A30 Acknowledgment Philippine Standard on Auditing (PSA) 265, “Communicating Deficiencies in Internal Control to Those Charged with Governance and Management” should be read in conjunction with PSA 200 (Revised and Redrafted), “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Philippine Standards on Auditing.”
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PSA 265 3 Introduction Scope of this PSA 1. This Philippine Standard on Auditing (PSA) deals with the auditor’s responsibility to communicate appropriately to those charged with governance and management deficiencies in internal control 1 that the auditor has identified in an audit of financial statements. This PSA does not impose additional responsibilities on the auditor regarding obtaining an understanding of internal control and designing and performing tests of controls over and above the requirements of PSA 315 (Redrafted) and PSA 330 (Redrafted). 2 PSA 260 (Revised and Redrafted) 3 establishes further requirements and provides guidance regarding the auditor’s responsibility to communicate with those charged with governance in relation to the audit. 2. The auditor is required to obtain an understanding of internal control relevant to the audit when identifying and assessing the risks of material misstatement. 4 In making those risk assessments, the auditor considers internal control in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control. The auditor may identify deficiencies in internal control not only during this risk assessment process but also at any other stage of the audit. This PSA specifies which identified deficiencies the auditor is required to communicate to those charged with governance and management. 3. Nothing in this PSA precludes the auditor from communicating to those charged with governance and management other internal control matters that the auditor has identified during the audit.
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