<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>2
<FILENAME>1956audit.txt
<TEXT>
Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of
Aberdeen Australia Equity Fund, Inc.:

In planning and performing our audits of the financial statements of the
Aberdeen Australia Equity Fund, Inc. (the "Fund") as of and for the year
ended October 31, 2011, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), we considered the
Fund's internal control over financial reporting, including controls over
safeguarding securities, as a basis for designing our auditing procedures for
the purpose of expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control
over financial reporting. Accordingly, we express no such opinion.

Management of the Fund is responsible for establishing and maintaining
effective internal control over financial reporting. In fulfilling this
responsibility, estimates and judgments by management are required to
assess the expected benefits and related costs of controls. A company's
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company's internal
control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets
of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with
authorizations of management and directors of the Fund; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that
the degree of compliance with policies or procedures may deteriorate.

A deficiency in internal control over financial reporting exists when the
design or operation of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent or
detect misstatements on a timely basis. A material weakness is a deficiency,
or a combination of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material misstatement of
the Fund's annual or interim financial statements will not be prevented or
detected on a timely basis.

Our consideration of the Fund's internal control over financial reporting
was for the limited purpose described in the first paragraph and would not
necessarily disclose all deficiencies in internal control that might be
material weaknesses under standards established by the Public Company
Accounting Oversight Board (United States). However, we noted no
deficiencies in the Fund's internal control over financial reporting and its
operations, including controls over safeguarding securities that we consider
to be a material weakness as defined above as of October 31, 2011.

This report is intended solely for the information and use of management
and the Board of Directors of Aberdeen Australia Equity Fund, Inc. and the
Securities and Exchange Commission and is not intended to be and should
not be used by anyone other than these specified parties.


ss/KPMG LLP


Philadelphia, Pennsylvania
December 28, 2011


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