Ministry of Justice
On January 31, 2019 No. 53639
Appendix No. 9
to the Order of the Ministry of Finance of the Russian Federation of January 9, 2019 No. 2n
The International Standard of Audit (ISA) 265 "Informing persons who are responsible for corporate management and managements about shortcomings of internal control system" should be considered together with MCA 200 "Main objectives of the independent auditor and carrying out audit according to International standards of audit".
Scope of this standard
1. This International Standard of Audit (ISA) obliges the auditor to inform properly persons who are responsible for corporate management, and management about shortcomings of internal control system <1> which were revealed by the auditor when carrying out financial records audit. This standard does not impose subsidiary duties on the auditor concerning ensuring understanding of internal control system and development and carrying out tests of control facilities in excess of what also MCA 330 <2> already enters requirements of the MCA 315 standards (reviewed). MCA 260 (reviewed)> establishes additional requirements and contains recommendations for the auditor's obligations about informing persons who are responsible for corporate management for the booked audit.
<1> MCA 315 (reviewed) "Identification and risks assessment of essential misstatement by means of studying of the organization and its environment", items 4 and 12.
<2> MCA 330 "Audit procedures in response to the estimated risks".
<3> MCA 260 (reviewed) "Information exchange with persons who are responsible for corporate management".
2. In case of identification and risks assessment of essential misstatement from the auditor receipt of understanding of internal control system in the part concerning the booked audit <4> is required. In case of accomplishment of risks assessment the auditor analyzes means of internal control for the purpose of development of the audit procedures corresponding to the developed circumstances, but not for the purpose of expression of opinion on system effectiveness of internal control. The auditor can reveal shortcomings of internal control system not only during the course of performance assessment procedures of risk, but also at any other stage of audit. This standard determines about what of the revealed shortcomings the auditor shall report to persons who are responsible for corporate management and management.
<4> MCA 315 (reviewed) Item 12. The Items A68 - A73 make recommendations for the control facilities concerning the booked audit.
3. No provisions of this standard interfere with the auditor to report to persons who are responsible for corporate management and management about any other questions connected with internal control which the auditor revealed during audit.
The effective date
4. This standard becomes effective concerning financial records audit for the periods beginning on December 15, 2009 or after this date. <*>
5. The purpose of the auditor consists in proper informing persons who are responsible for corporate management and managements about shortcomings of internal control system which he revealed during audit and which, according to judgment of the auditor, are rather important to draw their attention.
6. For the purposes of International standards of audit the following terms have the stated below values:
(a) lack of internal control system - shortcoming which takes place if:
(i) the control facility is developed, implemented and functions in such a way that it is not able to prevent or timely to find and eliminate misstatements in the financial reporting, or;
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