Auditing Standard No. 265 on Communicating about Deficiencies in Internal Control with the Board of Directors and Management of the Audited Entity, issued together with Circular 214/2012/TT-BTC.

1. Scope of application 

1. Auditing Standard 265 specifies and provides guidance on the responsibilities of auditors. and auditing firms (hereinafter referred to as "auditors") In appropriate communication with the management and board of directors of the audited entity regarding deficiencies in internal control (paragraphs 04 and 12 of Vietnamese Auditing Standard No. 315) that the auditor has discovered during the audit of the financial statements. This standard does not provide for additional responsibilities of the auditor regarding understanding internal control and designing and performing control tests beyond the requirements of Vietnamese Auditing Standard No. 315 and No. 330. Vietnamese Auditing Standard No. 260 provides more specific regulations and guidance on the auditor's responsibility to communicate with the management of the audited entity regarding the audit.
2. According to paragraph 12 of Vietnamese Auditing Standard 315, when identifying and assessing the risk of material misstatement, the auditor must investigate the internal controls relevant to the audit (paragraphs A60-A65 of Vietnamese Auditing Standard 315 provide guidance on internal controls relevant to the audit). During the risk assessment process, the auditor considers internal controls to design audit procedures appropriate to the audited entity's circumstances, but not to express an opinion on the effectiveness of the internal controls. The auditor may discover deficiencies in internal controls not only during the risk assessment but also at any other stage of the audit. This auditing standard specifies and provides guidance on the deficiencies discovered that the auditor must communicate to the management and leadership of the audited entity.
3. This auditing standard does not limit the auditor's communication with the management and leadership of the audited entity regarding other internal control issues that the auditor has discovered during the audit.
4. Auditors and audit firms must comply with the provisions and guidance of this Standard when communicating about deficiencies in internal controls with the management and leadership of the audited entity during the audit and provision of related services.

The audited entity (client) and the parties using the audit results must have the necessary understanding of the provisions and guidance of this Standard in order to fulfill their responsibilities and to coordinate their work with the auditor and the audit firm in resolving the relationships during the audit process.

2. Objectives

The auditor's objectives and auditing firms This involves appropriately communicating with the management and leadership of the audited entity about deficiencies in internal controls that the auditor has identified during the audit and which, in the auditor's professional judgment, are serious and require the attention of the management and leadership.

View full text Auditing Standard 265