<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>2
<FILENAME>iaf77BAudit.txt
<DESCRIPTION>KPMG AUDIT LETTER FOR IAF
<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, 2012, 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, 2012.

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 21, 2012


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</DOCUMENT>
