ASIC has updated guidance on how, when, and which audit file review findings will be communicated to directors, audit committees and senior managers.
The revised Regulatory Guide 260 Communicating findings from audit files to directors, audit committees or senior managers (RG 260) provides practical guidance for directors, audit committees, and senior managers of companies, responsible entities, superannuation trustees, disclosing entities, and audit firms.
The updates reflect:
- ASIC’s new responsibilities and powers following law reform to regulate the financial reporting and audit requirements of registrable superannuation entities (RSEs), and
- that the Australian Securities and Investments Commission Act 2001 (ASIC Act) now allows ASIC to communicate findings from audit file reviews to the relevant directors of superannuation trustees.
The updated RG 260 replaces previous guidance issued in July 2022.
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Regulatory Guide 260 Communicating findings from audit files to directors, audit committees or senior managers
Background
RG 260 outlines ASIC’s approach to communicating financial reporting and audit quality findings from audit file reviews. It aims to help entities and audit firms understand what to expect.
ASIC has a pro-active surveillance program designed to raise the standard of financial reporting and audits and build confidence in the financial system.
We review a selection of audit files and where we have concerns about audit quality or auditor independence, we raise these with the audit firms and include our findings and observations in a public report.
We also share our findings, together with the firms’ response, with the directors, audit committees, senior managers and other key stakeholders of the audited entity. The purpose of this is so the audit firms and audited entities can work together and take steps to improve financial reporting and audit quality.
