SA 265 — Communication of Internal Control Deficiencies

Issued by ICAI AASB · Concluding

Reporting significant control deficiencies in writing to TCWG.

Objective

To communicate, in writing, significant deficiencies in internal control identified during the audit, to TCWG (and management).

Key requirements

Determination of which deficiencies are "significant"
Written communication to TCWG of significant deficiencies on a timely basis
Communication to management of other deficiencies of sufficient importance
Distinguished from CARO clause (xiv) internal-audit reporting and from IFC opinion

Typical procedures

Management Letter compiling control observations from substantive testing
Annexure to the SA 260 closing letter listing significant deficiencies

Common pitfalls

No clear severity threshold for "significant"
Management Letter never formally issued

SA 265 in practice

SA 265 sits in the Concluding phase of the audit. The Standards on Auditing are issued by the ICAI Auditing and Assurance Standards Board (AASB) and deemed to be prescribed by the Central Government under Section 143(10) of the Companies Act 2013. Compliance with SAs is mandatory for every audit conducted by a Chartered Accountant in India.

For authoritative text, refer to the ICAI AASB Compendium of Standards on Auditing at icai.org.

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SA 260 — Communication with Those Charged with Governance

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SA 300 — Planning an Audit of Financial Statements