<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>2
<FILENAME>77B_IAF.txt
<DESCRIPTION>AUDIT LETTER
<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 audit of the financial
statements of the Aberdeen Australia Equity Fund,
Inc. (the "Fund") as of and for the year ended
October 31, 2016, 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 fund; (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, 2016.

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.


/s/ KPMG LLP

Philadelphia, Pennsylvania
December 29, 2016


</TEXT>
</DOCUMENT>
