NFRA has flagged gaps in SA 260 compliance, stressing that statutory auditors must communicate significant audit matters to audit committees effectively and on time. The regulator has cautioned against treating auditor communication as a mere checklist, highlighting the importance of proper documentation and meaningful governance oversight.
The National Financial Reporting Authority (NFRA) has raised concerns over shortcomings in the implementation of Standard on Auditing (SA) 260, which establishes requirements for communication between statutory auditors and those responsible for corporate governance, including audit committees. The regulator has stressed the importance of ensuring that such communication is meaningful, timely and properly documented, rather than being limited to fulfilling formal compliance requirements.
The concerns were discussed during an NFRA webinar focusing on communication with those charged with governance under SA 260. The discussion highlighted the need for statutory auditors to communicate significant audit-related matters effectively, bring important issues to the attention of audit committees at the appropriate time, and maintain adequate records of these communications.
NFRA’s observations come in the context of its January 2026 circular on effective communication between statutory auditors and audit committees. The circular underscores the significance of substantive engagement between auditors and governance bodies in strengthening audit quality and supporting effective corporate oversight.
The regulator’s emphasis indicates that compliance with SA 260 should not be approached as a mere procedural exercise. Instead, auditors are expected to ensure that important findings, significant audit risks and relevant concerns are communicated clearly and promptly to those charged with governance. Proper documentation is also essential to demonstrate that the required communication has taken place and that significant matters have received appropriate attention.
Effective implementation of SA 260 can help improve transparency, strengthen the relationship between statutory auditors and audit committees, and support better oversight of financial reporting. NFRA’s focus on these gaps reinforces the need for audit professionals to adopt a more substantive approach to governance communication, with an emphasis on accountability, professional judgement and audit effectiveness. CASansaar