{"id":"F2009L04089","name":"ASA 510 - Initial Audit Engagements - Opening Balances - October 2009","slug":"asa-510-initial-audit-engagements-opening-balances-october-2009","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":81663,"registerId":"commonwealth-F2009L04089-current","compilationNumber":null,"startDate":"2026-04-02","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a Copy of this Auditing Standa","sectionType":"section","heading":"Obtaining a Copy of this Auditing Standard","content":"##### Obtaining a Copy of this Auditing Standard\n\nThe most recently compiled versions of Auditing Standards, original Standards and amending Standards (see Compilation Details) are available on the AUASB website: www.auasb.gov.au","sortOrder":0},{"sectionNumber":"Contact Details","sectionType":"section","heading":"Contact Details","content":"##### Contact Details\n\n| Auditing and Assurance Standards BoardLevel 20, 500 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E‑mail: enquiries@auasb.gov.auPostal Address:PO Box 204Collins Street WestMelbourne Victoria 8007AUSTRALIA |\n| -------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- |","sortOrder":1},{"sectionNumber":"COPYRIGHT","sectionType":"section","heading":"COPYRIGHT","content":"##### COPYRIGHT\n\n© 2023 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).\n\nRequests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.\n\nThis Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use only.\n\nFurther information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Executive Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Any decision to approve a request may also require the agreement of IFAC.\n\nISSN 1833‑4393","sortOrder":2},{"sectionNumber":"CONTENTS","sectionType":"part","heading":"CONTENTS","content":"# CONTENTS\n\nCOMPILATION DETAILS\n\nAUTHORITY STATEMENT\n\nCONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING\n\nParagraphs\n\nApplication...............................................Aus 0.1‑Aus 0.2\n\nOperative Date.........................................................Aus 0.3\n\nIntroduction\n\nScope of this Auditing Standard..................................................1\n\nEffective Date...............................................................2\n\nObjective..................................................................3\n\nDefinitions.................................................................4\n\nRequirements\n\nAudit Procedures.....................................................5‑9\n\nAudit Conclusions and Reporting.......................................10‑13\n\nApplication and Other Explanatory Material\n\nAudit Procedures..................................................A1‑A7\n\nAudit Conclusions and Reporting......................................A8‑A9\n\nAppendix 1: Illustrations of Auditors’ Reports with Modified Opinions","sortOrder":3},{"sectionNumber":"COMPILATION DETAILS","sectionType":"part","heading":"COMPILATION DETAILS","content":"##### Obtaining a Copy of this Auditing Standard\n\nThe most recently compiled versions of Auditing Standards, original Standards and amending Standards (see Compilation Details) are available on the AUASB website: www.auasb.gov.au\n\n##### Contact Details\n\n| Auditing and Assurance Standards BoardLevel 20, 500 Collins StreetMelbourne Victoria 3000AUSTRALIA | Phone: (03) 8080 7400E‑mail: enquiries@auasb.gov.auPostal Address:PO Box 204Collins Street WestMelbourne Victoria 8007AUSTRALIA |\n| -------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- |\n\n##### COPYRIGHT\n\n© 2023 Commonwealth of Australia. The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB).\n\nRequests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.\n\nThis Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing. The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non‑commercial use only.\n\nFurther information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Executive Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to [enquiries@auasb.gov.au](mailto:enquiries@auasb.gov.au). Any decision to approve a request may also require the agreement of IFAC.\n\nISSN 1833‑4393\n\n# CONTENTS\n\nCOMPILATION DETAILS\n\nAUTHORITY STATEMENT\n\nCONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING\n\nParagraphs\n\nApplication...............................................Aus 0.1‑Aus 0.2\n\nOperative Date.........................................................Aus 0.3\n\nIntroduction\n\nScope of this Auditing Standard..................................................1\n\nEffective Date...............................................................2\n\nObjective..................................................................3\n\nDefinitions.................................................................4\n\nRequirements\n\nAudit Procedures.....................................................5‑9\n\nAudit Conclusions and Reporting.......................................10‑13\n\nApplication and Other Explanatory Material\n\nAudit Procedures..................................................A1‑A7\n\nAudit Conclusions and Reporting......................................A8‑A9\n\nAppendix 1: Illustrations of Auditors’ Reports with Modified Opinions\n\n  \n\n# COMPILATION DETAILS\n\n### Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances (as Amended)\n\nThis compilation takes into account amendments made up to and including 15 March 2023 and was prepared on 22 March 2023 by the Auditing and Assurance Standards Board (AUASB).\n\nThis compilation is not a separate Auditing Standard made by the AUASB. Instead, it is a representation of ASA 510 (October 2009) as amended by other Auditing Standards which are listed in the Table below.\n\n##### Table of Standards\n\n| Standard   | Date made       | Operative Date                                                         |\n| ---------- | --------------- | ---------------------------------------------------------------------- |\n| ASA 510    | 27 October 2009 | Financial reporting periods commencing on or after 1 January 2010      |\n| ASA 2015‑1 | 1 December 2015 | Financial reporting periods ending on or after 15 December 2016        |\n| ASA 2020-2 | 30 June 2020    | Financial reporting periods ending on or after 15 July 2020            |\n| ASA 2020-1 | 3 March 2020    | Financial reporting periods commencing on or after 15 December 2021[*] |\n| ASA 2023-1 | 15 March 2023   | Financial reporting periods commencing on or after 1 January 2023      |\n\n##### Legislation History\n\n| Standard   | Registration Number | Registration Date | Commencement Date |\n| ---------- | ------------------- | ----------------- | ----------------- |\n| ASA 510    | F2009L04089         | 16 November 2009  | 17 November 2009  |\n| ASA 2015‑1 | F2015L02032         | 16 December 2015  | 17 December 2015  |\n| ASA 2020-2 | F2020L00885         | 7 July 2020       | 8 July 2020       |\n| ASA 2020-1 | F2020L00252         | 13 March 2020     | 14 March 2020     |\n| ASA 2023-1 | F2023L00295         | 21 March 2023     | 22 March 2023     |\n\n  \n\n##### Table of Amendments\n\n| Paragraph affected | How affected | By … [paragraph]        |\n| ------------------ | ------------ | ----------------------- |\n| A8(b)              | Amended      | ASA 2015-1 [148]        |\n| Appendix 1         | Amended      | ASA 2015-1 [149]        |\n| Appendix 1         | Amended      | ASA 2020-2 [37] to [40] |\n| 9Footnote 4        | Amended      | ASA 2020-1 [8]          |\n| Appendix 1         | Amended      | ASA 2023-1 [18] to [19] |\n\n  \n\n## AUTHORITY STATEMENT\n\nAuditing Standard ASA 510 Initial Audit Engagements‑Opening Balances (as amended to 15 March 2023) is set out in paragraphs Aus 0.1 to A9 and Appendix 1.\n\nThis Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.\n\n##### Conformity with International Standards on Auditing\n\nThis Auditing Standard conforms with International Standard on Auditing ISA 510 Initial Audit Engagements‑Opening Balances issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).\n\nParagraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.\n\nCompliance with this Auditing Standard enables compliance with ISA 510.","sortOrder":4},{"sectionNumber":"Auditing Standard ASA 510 Initial Audit ","sectionType":"division","heading":"Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances (as Amended)","content":"### Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances (as Amended)\n\nThis compilation takes into account amendments made up to and including 15 March 2023 and was prepared on 22 March 2023 by the Auditing and Assurance Standards Board (AUASB).\n\nThis compilation is not a separate Auditing Standard made by the AUASB. Instead, it is a representation of ASA 510 (October 2009) as amended by other Auditing Standards which are listed in the Table below.","sortOrder":5},{"sectionNumber":"Table of Standards","sectionType":"section","heading":"Table of Standards","content":"##### Table of Standards\n\n| Standard   | Date made       | Operative Date                                                         |\n| ---------- | --------------- | ---------------------------------------------------------------------- |\n| ASA 510    | 27 October 2009 | Financial reporting periods commencing on or after 1 January 2010      |\n| ASA 2015‑1 | 1 December 2015 | Financial reporting periods ending on or after 15 December 2016        |\n| ASA 2020-2 | 30 June 2020    | Financial reporting periods ending on or after 15 July 2020            |\n| ASA 2020-1 | 3 March 2020    | Financial reporting periods commencing on or after 15 December 2021[*] |\n| ASA 2023-1 | 15 March 2023   | Financial reporting periods commencing on or after 1 January 2023      |","sortOrder":6},{"sectionNumber":"Legislation History","sectionType":"section","heading":"Legislation History","content":"##### Legislation History\n\n| Standard   | Registration Number | Registration Date | Commencement Date |\n| ---------- | ------------------- | ----------------- | ----------------- |\n| ASA 510    | F2009L04089         | 16 November 2009  | 17 November 2009  |\n| ASA 2015‑1 | F2015L02032         | 16 December 2015  | 17 December 2015  |\n| ASA 2020-2 | F2020L00885         | 7 July 2020       | 8 July 2020       |\n| ASA 2020-1 | F2020L00252         | 13 March 2020     | 14 March 2020     |\n| ASA 2023-1 | F2023L00295         | 21 March 2023     | 22 March 2023     |","sortOrder":7},{"sectionNumber":"Table of Amendments","sectionType":"section","heading":"Table of Amendments","content":"##### Table of Amendments\n\n| Paragraph affected | How affected | By … [paragraph]        |\n| ------------------ | ------------ | ----------------------- |\n| A8(b)              | Amended      | ASA 2015-1 [148]        |\n| Appendix 1         | Amended      | ASA 2015-1 [149]        |\n| Appendix 1         | Amended      | ASA 2020-2 [37] to [40] |\n| 9Footnote 4        | Amended      | ASA 2020-1 [8]          |\n| Appendix 1         | Amended      | ASA 2023-1 [18] to [19] |\n\n  \n\n## AUTHORITY STATEMENT\n\nAuditing Standard ASA 510 Initial Audit Engagements‑Opening Balances (as amended to 15 March 2023) is set out in paragraphs Aus 0.1 to A9 and Appendix 1.\n\nThis Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.\n\n##### Conformity with International Standards on Auditing\n\nThis Auditing Standard conforms with International Standard on Auditing ISA 510 Initial Audit Engagements‑Opening Balances issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).\n\nParagraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.\n\nCompliance with this Auditing Standard enables compliance with ISA 510.","sortOrder":8},{"sectionNumber":"AUTHORITY STATEMENT","sectionType":"part","heading":"AUTHORITY STATEMENT","content":"## AUTHORITY STATEMENT\n\nAuditing Standard ASA 510 Initial Audit Engagements‑Opening Balances (as amended to 15 March 2023) is set out in paragraphs Aus 0.1 to A9 and Appendix 1.\n\nThis Auditing Standard is to be read in conjunction with ASA 101 Preamble to AUASB Standards, which sets out how AUASB Standards are to be understood, interpreted and applied. This Auditing Standard is to be read also in conjunction with ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards.","sortOrder":9},{"sectionNumber":"Conformity with International Standards ","sectionType":"section","heading":"Conformity with International Standards on Auditing","content":"##### Conformity with International Standards on Auditing\n\nThis Auditing Standard conforms with International Standard on Auditing ISA 510 Initial Audit Engagements‑Opening Balances issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).\n\nParagraphs that have been added to this Auditing Standard (and do not appear in the text of the equivalent ISA) are identified with the prefix “Aus”.\n\nCompliance with this Auditing Standard enables compliance with ISA 510.","sortOrder":10},{"sectionNumber":"Auditing Standard ASA 510","sectionType":"part","heading":"Auditing Standard ASA 510","content":"Auditing Standard ASA 510\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 510 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 15 March 2023 (see Compilation Details).\n\n## Auditing Standard ASA 510\n\n### Initial Audit Engagements‑Opening Balances\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s responsibilities relating to opening balances in an initial audit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments. When the financial report includes comparative financial information, the requirements and guidance in ASA 710[\\[1\\]](#_ftn2) also apply. ASA 300[\\[2\\]](#_ftn3) includes additional requirements and guidance regarding activities prior to starting an initial audit.\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objective\n\n1.  In conducting an initial audit engagement, the objective of the auditor is to obtain sufficient appropriate audit evidence about whether:\n    1.  Opening balances contain misstatements that materially affect the current period’s financial report; and\n    2.  Appropriate accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\n##### Definitions\n\n1.  For the purposes of this Auditing Standard, the following terms have the meanings attributed below:\n    1.  Initial audit engagement means an engagement in which either:\n        1.  The financial report for the prior period was not audited; or\n        2.  The financial report for the prior period was audited by a predecessor auditor.\n    2.  Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.\n    3.  Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.\n\n##### Requirements\n\n###### Audit Procedures\n\nOpening Balances\n\n1.  The auditor shall read the most recent financial report, if any, and the predecessor auditor’s report thereon, if any, for information relevant to opening balances, including disclosures.\n2.  The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report by: (Ref: Para. A1‑A2)\n    1.  Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;\n    2.  Determining whether the opening balances reflect the application of appropriate accounting policies; and\n    3.  Performing one or more of the following: (Ref: Para. A3‑A7)\n        1.  Where the prior year financial report was audited, reviewing the predecessor auditor’s working papers to obtain evidence regarding the opening balances;\n        2.  Evaluating whether audit procedures performed in the current period provide evidence relevant to the opening balances; or\n        3.  Performing specific audit procedures to obtain evidence regarding the opening balances.\n3.  If the auditor obtains audit evidence that the opening balances contain misstatements that could materially affect the current period’s financial report, the auditor shall perform such additional audit procedures as are appropriate in the circumstances to determine the effect on the current period’s financial report. If the auditor concludes that such misstatements exist in the current period’s financial report, the auditor shall communicate the misstatements with the appropriate level of management and those charged with governance in accordance with ASA 450.[\\[3\\]](#_ftn4)\n\nConsistency of Accounting Policies\n\n1.  The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, and whether changes in the accounting policies have been appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\nRelevant Information in the Predecessor Auditor’s Report\n\n1.  If the prior period’s financial report was audited by a predecessor auditor and there was a modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification in assessing the risks of material misstatement in the current period’s financial report in accordance with ASA 315.[\\[4\\]](#_ftn5)\n\n###### Audit Conclusions and Reporting\n\nOpening Balances\n\n1.  If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.[\\[5\\]](#_ftn6) (Ref: Para. A8)\n2.  If the auditor concludes that the opening balances contain a misstatement that materially affects the current period’s financial report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate, in accordance with ASA 705.\n\nConsistency of Accounting Policies\n\n1.  If the auditor concludes that:\n    1.  the current period’s accounting policies are not consistently applied in relation to opening balances in accordance with the applicable financial reporting framework; or\n    2.  a change in accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with the applicable financial reporting framework,\n\nthe auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance with ASA 705.\n\nModification to the Opinion in the Predecessor Auditor’s Report\n\n1.  If the predecessor auditor’s opinion regarding the prior period’s financial report included a modification to the auditor’s opinion that remains relevant and material to the current period’s financial report, the auditor shall modify the auditor’s opinion on the current period’s financial report in accordance with ASA 705 and ASA 710. (Ref: Para. A9)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Audit Procedures\n\nConsiderations Specific to Public Sector Entities (Ref: Para. 6)\n\n1.  In the public sector, there may be legal or regulatory limitations on the information that the current auditor can obtain from a predecessor auditor. For example, if a public sector entity that has previously been audited by a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) is privatised, the amount of access to working papers or other information that the statutorily appointed auditor can provide a newly appointed auditor that is in the private sector may be constrained by privacy laws or regulations. In situations where such communications are constrained, audit evidence may need to be obtained through other means and, if sufficient appropriate audit evidence cannot be obtained, consideration given to the effect on the auditor’s opinion.\n2.  If the statutorily appointed auditor outsources an audit of a public sector entity to a private sector audit firm, and the statutorily appointed auditor appoints an audit firm other than the firm that audited the financial report of the public sector entity in the prior period, this is not usually regarded as a change in auditors for the statutorily appointed auditor. Depending on the nature of the outsourcing arrangement, however, the audit engagement may be considered an initial audit engagement from the perspective of the private sector auditor in fulfilling their responsibilities, and therefore this Auditing Standard applies.\n\nOpening Balances (Ref: Para. 6(c))\n\n1.  The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as:\n\n The accounting policies followed by the entity.\n\n The nature of the account balances, classes of transactions and disclosures and the risks of material misstatement in the current period’s financial report.\n\n The significance of the opening balances relative to the current period’s financial report.\n\n Whether the prior period’s financial report was audited and, if so, whether the predecessor auditor’s opinion was modified.\n\n1.  If the prior period’s financial report was audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor’s working papers. Whether such a review provides sufficient appropriate audit evidence is influenced by the professional competence and independence of the predecessor auditor.\n2.  Relevant ethical and professional requirements[](#_ftn7) guide the current auditor’s communications with the predecessor auditor.\n3.  For current assets and liabilities, some audit evidence about opening balances may be obtained as part of the current period’s audit procedures. For example, the collection (payment) of opening accounts receivable (accounts payable) during the current period will provide some audit evidence of their existence, rights and obligations, completeness and valuation at the beginning of the period. In the case of inventories, however, the current period’s audit procedures on the closing inventory balance provide little audit evidence regarding inventory on hand at the beginning of the period. Therefore, additional audit procedures may be necessary, and one or more of the following may provide sufficient appropriate audit evidence:\n\n Observing a current physical inventory count and reconciling it to the opening inventory quantities.\n\n Performing audit procedures on the valuation of the opening inventory items.\n\n Performing audit procedures on gross profit and cut‑off.\n\n1.  For non‑current assets and liabilities, such as property, plant and equipment, investments and long‑term debt, some audit evidence may be obtained by examining the accounting records and other information underlying the opening balances. In certain cases, the auditor may be able to obtain some audit evidence regarding opening balances through confirmation with third parties, for example, for long‑term debt and investments. In other cases, the auditor may need to carry out additional audit procedures.\n\n###### Audit Conclusions and Reporting\n\nOpening Balances (Ref: Para. 10-11)\n\n1.  ASA 705 establishes requirements and provides guidance on circumstances that may result in a modification to the auditor’s opinion on the financial report, the type of opinion appropriate in the circumstances, and the content of the auditor’s report when the auditor’s opinion is modified. The inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances may result in the following modifications to the opinion in the auditor’s report:\n    1.  A qualified opinion or a disclaimer of opinion, as is appropriate in the circumstances.\n    2.  \\[Deleted by the AUASB. Refer \\[Aus\\] Illustration 2A\\]\n\nAppendix 1 includes illustrative auditors’ reports.\n\nModification to the Opinion in the Predecessor Auditor’s Report (Ref: Para. 13)\n\n1.  In some situations, a modification to the predecessor auditor’s opinion may not be relevant and material to the opinion on the current period’s financial report. This may be the case where, for example, there was a scope limitation in the prior period, but the matter giving rise to the scope limitation has been resolved in the current period.","sortOrder":11},{"sectionNumber":"Initial Audit Engagements‑Opening Balanc","sectionType":"division","heading":"Initial Audit Engagements‑Opening Balances","content":"Auditing Standard ASA 510\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 510 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 15 March 2023 (see Compilation Details).\n\n## Auditing Standard ASA 510\n\n### Initial Audit Engagements‑Opening Balances\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s responsibilities relating to opening balances in an initial audit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments. When the financial report includes comparative financial information, the requirements and guidance in ASA 710[\\[1\\]](#_ftn2) also apply. ASA 300[\\[2\\]](#_ftn3) includes additional requirements and guidance regarding activities prior to starting an initial audit.\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objective\n\n1.  In conducting an initial audit engagement, the objective of the auditor is to obtain sufficient appropriate audit evidence about whether:\n    1.  Opening balances contain misstatements that materially affect the current period’s financial report; and\n    2.  Appropriate accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\n##### Definitions\n\n1.  For the purposes of this Auditing Standard, the following terms have the meanings attributed below:\n    1.  Initial audit engagement means an engagement in which either:\n        1.  The financial report for the prior period was not audited; or\n        2.  The financial report for the prior period was audited by a predecessor auditor.\n    2.  Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.\n    3.  Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.\n\n##### Requirements\n\n###### Audit Procedures\n\nOpening Balances\n\n1.  The auditor shall read the most recent financial report, if any, and the predecessor auditor’s report thereon, if any, for information relevant to opening balances, including disclosures.\n2.  The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report by: (Ref: Para. A1‑A2)\n    1.  Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;\n    2.  Determining whether the opening balances reflect the application of appropriate accounting policies; and\n    3.  Performing one or more of the following: (Ref: Para. A3‑A7)\n        1.  Where the prior year financial report was audited, reviewing the predecessor auditor’s working papers to obtain evidence regarding the opening balances;\n        2.  Evaluating whether audit procedures performed in the current period provide evidence relevant to the opening balances; or\n        3.  Performing specific audit procedures to obtain evidence regarding the opening balances.\n3.  If the auditor obtains audit evidence that the opening balances contain misstatements that could materially affect the current period’s financial report, the auditor shall perform such additional audit procedures as are appropriate in the circumstances to determine the effect on the current period’s financial report. If the auditor concludes that such misstatements exist in the current period’s financial report, the auditor shall communicate the misstatements with the appropriate level of management and those charged with governance in accordance with ASA 450.[\\[3\\]](#_ftn4)\n\nConsistency of Accounting Policies\n\n1.  The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, and whether changes in the accounting policies have been appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\nRelevant Information in the Predecessor Auditor’s Report\n\n1.  If the prior period’s financial report was audited by a predecessor auditor and there was a modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification in assessing the risks of material misstatement in the current period’s financial report in accordance with ASA 315.[\\[4\\]](#_ftn5)\n\n###### Audit Conclusions and Reporting\n\nOpening Balances\n\n1.  If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.[\\[5\\]](#_ftn6) (Ref: Para. A8)\n2.  If the auditor concludes that the opening balances contain a misstatement that materially affects the current period’s financial report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate, in accordance with ASA 705.\n\nConsistency of Accounting Policies\n\n1.  If the auditor concludes that:\n    1.  the current period’s accounting policies are not consistently applied in relation to opening balances in accordance with the applicable financial reporting framework; or\n    2.  a change in accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with the applicable financial reporting framework,\n\nthe auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance with ASA 705.\n\nModification to the Opinion in the Predecessor Auditor’s Report\n\n1.  If the predecessor auditor’s opinion regarding the prior period’s financial report included a modification to the auditor’s opinion that remains relevant and material to the current period’s financial report, the auditor shall modify the auditor’s opinion on the current period’s financial report in accordance with ASA 705 and ASA 710. (Ref: Para. A9)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Audit Procedures\n\nConsiderations Specific to Public Sector Entities (Ref: Para. 6)\n\n1.  In the public sector, there may be legal or regulatory limitations on the information that the current auditor can obtain from a predecessor auditor. For example, if a public sector entity that has previously been audited by a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) is privatised, the amount of access to working papers or other information that the statutorily appointed auditor can provide a newly appointed auditor that is in the private sector may be constrained by privacy laws or regulations. In situations where such communications are constrained, audit evidence may need to be obtained through other means and, if sufficient appropriate audit evidence cannot be obtained, consideration given to the effect on the auditor’s opinion.\n2.  If the statutorily appointed auditor outsources an audit of a public sector entity to a private sector audit firm, and the statutorily appointed auditor appoints an audit firm other than the firm that audited the financial report of the public sector entity in the prior period, this is not usually regarded as a change in auditors for the statutorily appointed auditor. Depending on the nature of the outsourcing arrangement, however, the audit engagement may be considered an initial audit engagement from the perspective of the private sector auditor in fulfilling their responsibilities, and therefore this Auditing Standard applies.\n\nOpening Balances (Ref: Para. 6(c))\n\n1.  The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as:\n\n The accounting policies followed by the entity.\n\n The nature of the account balances, classes of transactions and disclosures and the risks of material misstatement in the current period’s financial report.\n\n The significance of the opening balances relative to the current period’s financial report.\n\n Whether the prior period’s financial report was audited and, if so, whether the predecessor auditor’s opinion was modified.\n\n1.  If the prior period’s financial report was audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor’s working papers. Whether such a review provides sufficient appropriate audit evidence is influenced by the professional competence and independence of the predecessor auditor.\n2.  Relevant ethical and professional requirements[](#_ftn7) guide the current auditor’s communications with the predecessor auditor.\n3.  For current assets and liabilities, some audit evidence about opening balances may be obtained as part of the current period’s audit procedures. For example, the collection (payment) of opening accounts receivable (accounts payable) during the current period will provide some audit evidence of their existence, rights and obligations, completeness and valuation at the beginning of the period. In the case of inventories, however, the current period’s audit procedures on the closing inventory balance provide little audit evidence regarding inventory on hand at the beginning of the period. Therefore, additional audit procedures may be necessary, and one or more of the following may provide sufficient appropriate audit evidence:\n\n Observing a current physical inventory count and reconciling it to the opening inventory quantities.\n\n Performing audit procedures on the valuation of the opening inventory items.\n\n Performing audit procedures on gross profit and cut‑off.\n\n1.  For non‑current assets and liabilities, such as property, plant and equipment, investments and long‑term debt, some audit evidence may be obtained by examining the accounting records and other information underlying the opening balances. In certain cases, the auditor may be able to obtain some audit evidence regarding opening balances through confirmation with third parties, for example, for long‑term debt and investments. In other cases, the auditor may need to carry out additional audit procedures.\n\n###### Audit Conclusions and Reporting\n\nOpening Balances (Ref: Para. 10-11)\n\n1.  ASA 705 establishes requirements and provides guidance on circumstances that may result in a modification to the auditor’s opinion on the financial report, the type of opinion appropriate in the circumstances, and the content of the auditor’s report when the auditor’s opinion is modified. The inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances may result in the following modifications to the opinion in the auditor’s report:\n    1.  A qualified opinion or a disclaimer of opinion, as is appropriate in the circumstances.\n    2.  \\[Deleted by the AUASB. Refer \\[Aus\\] Illustration 2A\\]\n\nAppendix 1 includes illustrative auditors’ reports.\n\nModification to the Opinion in the Predecessor Auditor’s Report (Ref: Para. 13)\n\n1.  In some situations, a modification to the predecessor auditor’s opinion may not be relevant and material to the opinion on the current period’s financial report. This may be the case where, for example, there was a scope limitation in the prior period, but the matter giving rise to the scope limitation has been resolved in the current period.","sortOrder":12},{"sectionNumber":"Application","sectionType":"section","heading":"Application","content":"##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.","sortOrder":13},{"sectionNumber":"Operative Date","sectionType":"section","heading":"Operative Date","content":"##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]","sortOrder":14},{"sectionNumber":"Introduction","sectionType":"section","heading":"Introduction","content":"Auditing Standard ASA 510\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 510 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 15 March 2023 (see Compilation Details).\n\n## Auditing Standard ASA 510\n\n### Initial Audit Engagements‑Opening Balances\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s responsibilities relating to opening balances in an initial audit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments. When the financial report includes comparative financial information, the requirements and guidance in ASA 710[\\[1\\]](#_ftn2) also apply. ASA 300[\\[2\\]](#_ftn3) includes additional requirements and guidance regarding activities prior to starting an initial audit.\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objective\n\n1.  In conducting an initial audit engagement, the objective of the auditor is to obtain sufficient appropriate audit evidence about whether:\n    1.  Opening balances contain misstatements that materially affect the current period’s financial report; and\n    2.  Appropriate accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\n##### Definitions\n\n1.  For the purposes of this Auditing Standard, the following terms have the meanings attributed below:\n    1.  Initial audit engagement means an engagement in which either:\n        1.  The financial report for the prior period was not audited; or\n        2.  The financial report for the prior period was audited by a predecessor auditor.\n    2.  Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.\n    3.  Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.\n\n##### Requirements\n\n###### Audit Procedures\n\nOpening Balances\n\n1.  The auditor shall read the most recent financial report, if any, and the predecessor auditor’s report thereon, if any, for information relevant to opening balances, including disclosures.\n2.  The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report by: (Ref: Para. A1‑A2)\n    1.  Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;\n    2.  Determining whether the opening balances reflect the application of appropriate accounting policies; and\n    3.  Performing one or more of the following: (Ref: Para. A3‑A7)\n        1.  Where the prior year financial report was audited, reviewing the predecessor auditor’s working papers to obtain evidence regarding the opening balances;\n        2.  Evaluating whether audit procedures performed in the current period provide evidence relevant to the opening balances; or\n        3.  Performing specific audit procedures to obtain evidence regarding the opening balances.\n3.  If the auditor obtains audit evidence that the opening balances contain misstatements that could materially affect the current period’s financial report, the auditor shall perform such additional audit procedures as are appropriate in the circumstances to determine the effect on the current period’s financial report. If the auditor concludes that such misstatements exist in the current period’s financial report, the auditor shall communicate the misstatements with the appropriate level of management and those charged with governance in accordance with ASA 450.[\\[3\\]](#_ftn4)\n\nConsistency of Accounting Policies\n\n1.  The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, and whether changes in the accounting policies have been appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\nRelevant Information in the Predecessor Auditor’s Report\n\n1.  If the prior period’s financial report was audited by a predecessor auditor and there was a modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification in assessing the risks of material misstatement in the current period’s financial report in accordance with ASA 315.[\\[4\\]](#_ftn5)\n\n###### Audit Conclusions and Reporting\n\nOpening Balances\n\n1.  If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.[\\[5\\]](#_ftn6) (Ref: Para. A8)\n2.  If the auditor concludes that the opening balances contain a misstatement that materially affects the current period’s financial report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate, in accordance with ASA 705.\n\nConsistency of Accounting Policies\n\n1.  If the auditor concludes that:\n    1.  the current period’s accounting policies are not consistently applied in relation to opening balances in accordance with the applicable financial reporting framework; or\n    2.  a change in accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with the applicable financial reporting framework,\n\nthe auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance with ASA 705.\n\nModification to the Opinion in the Predecessor Auditor’s Report\n\n1.  If the predecessor auditor’s opinion regarding the prior period’s financial report included a modification to the auditor’s opinion that remains relevant and material to the current period’s financial report, the auditor shall modify the auditor’s opinion on the current period’s financial report in accordance with ASA 705 and ASA 710. (Ref: Para. A9)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Audit Procedures\n\nConsiderations Specific to Public Sector Entities (Ref: Para. 6)\n\n1.  In the public sector, there may be legal or regulatory limitations on the information that the current auditor can obtain from a predecessor auditor. For example, if a public sector entity that has previously been audited by a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) is privatised, the amount of access to working papers or other information that the statutorily appointed auditor can provide a newly appointed auditor that is in the private sector may be constrained by privacy laws or regulations. In situations where such communications are constrained, audit evidence may need to be obtained through other means and, if sufficient appropriate audit evidence cannot be obtained, consideration given to the effect on the auditor’s opinion.\n2.  If the statutorily appointed auditor outsources an audit of a public sector entity to a private sector audit firm, and the statutorily appointed auditor appoints an audit firm other than the firm that audited the financial report of the public sector entity in the prior period, this is not usually regarded as a change in auditors for the statutorily appointed auditor. Depending on the nature of the outsourcing arrangement, however, the audit engagement may be considered an initial audit engagement from the perspective of the private sector auditor in fulfilling their responsibilities, and therefore this Auditing Standard applies.\n\nOpening Balances (Ref: Para. 6(c))\n\n1.  The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as:\n\n The accounting policies followed by the entity.\n\n The nature of the account balances, classes of transactions and disclosures and the risks of material misstatement in the current period’s financial report.\n\n The significance of the opening balances relative to the current period’s financial report.\n\n Whether the prior period’s financial report was audited and, if so, whether the predecessor auditor’s opinion was modified.\n\n1.  If the prior period’s financial report was audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor’s working papers. Whether such a review provides sufficient appropriate audit evidence is influenced by the professional competence and independence of the predecessor auditor.\n2.  Relevant ethical and professional requirements[](#_ftn7) guide the current auditor’s communications with the predecessor auditor.\n3.  For current assets and liabilities, some audit evidence about opening balances may be obtained as part of the current period’s audit procedures. For example, the collection (payment) of opening accounts receivable (accounts payable) during the current period will provide some audit evidence of their existence, rights and obligations, completeness and valuation at the beginning of the period. In the case of inventories, however, the current period’s audit procedures on the closing inventory balance provide little audit evidence regarding inventory on hand at the beginning of the period. Therefore, additional audit procedures may be necessary, and one or more of the following may provide sufficient appropriate audit evidence:\n\n Observing a current physical inventory count and reconciling it to the opening inventory quantities.\n\n Performing audit procedures on the valuation of the opening inventory items.\n\n Performing audit procedures on gross profit and cut‑off.\n\n1.  For non‑current assets and liabilities, such as property, plant and equipment, investments and long‑term debt, some audit evidence may be obtained by examining the accounting records and other information underlying the opening balances. In certain cases, the auditor may be able to obtain some audit evidence regarding opening balances through confirmation with third parties, for example, for long‑term debt and investments. In other cases, the auditor may need to carry out additional audit procedures.\n\n###### Audit Conclusions and Reporting\n\nOpening Balances (Ref: Para. 10-11)\n\n1.  ASA 705 establishes requirements and provides guidance on circumstances that may result in a modification to the auditor’s opinion on the financial report, the type of opinion appropriate in the circumstances, and the content of the auditor’s report when the auditor’s opinion is modified. The inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances may result in the following modifications to the opinion in the auditor’s report:\n    1.  A qualified opinion or a disclaimer of opinion, as is appropriate in the circumstances.\n    2.  \\[Deleted by the AUASB. Refer \\[Aus\\] Illustration 2A\\]\n\nAppendix 1 includes illustrative auditors’ reports.\n\nModification to the Opinion in the Predecessor Auditor’s Report (Ref: Para. 13)\n\n1.  In some situations, a modification to the predecessor auditor’s opinion may not be relevant and material to the opinion on the current period’s financial report. This may be the case where, for example, there was a scope limitation in the prior period, but the matter giving rise to the scope limitation has been resolved in the current period.","sortOrder":15},{"sectionNumber":"Scope of this Auditing Standard","sectionType":"section","heading":"Scope of this Auditing Standard","content":"###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s responsibilities relating to opening balances in an initial audit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments. When the financial report includes comparative financial information, the requirements and guidance in ASA 710[\\[1\\]](#_ftn2) also apply. ASA 300[\\[2\\]](#_ftn3) includes additional requirements and guidance regarding activities prior to starting an initial audit.","sortOrder":16},{"sectionNumber":"Effective Date","sectionType":"section","heading":"Effective Date","content":"###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]","sortOrder":17},{"sectionNumber":"Objective","sectionType":"section","heading":"Objective","content":"##### Objective\n\n1.  In conducting an initial audit engagement, the objective of the auditor is to obtain sufficient appropriate audit evidence about whether:\n    1.  Opening balances contain misstatements that materially affect the current period’s financial report; and\n    2.  Appropriate accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.","sortOrder":18},{"sectionNumber":"Definitions","sectionType":"section","heading":"Definitions","content":"##### Definitions\n\n1.  For the purposes of this Auditing Standard, the following terms have the meanings attributed below:\n    1.  Initial audit engagement means an engagement in which either:\n        1.  The financial report for the prior period was not audited; or\n        2.  The financial report for the prior period was audited by a predecessor auditor.\n    2.  Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.\n    3.  Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.","sortOrder":19},{"sectionNumber":"Requirements","sectionType":"section","heading":"Requirements","content":"Auditing Standard ASA 510\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 510 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 15 March 2023 (see Compilation Details).\n\n## Auditing Standard ASA 510\n\n### Initial Audit Engagements‑Opening Balances\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s responsibilities relating to opening balances in an initial audit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments. When the financial report includes comparative financial information, the requirements and guidance in ASA 710[\\[1\\]](#_ftn2) also apply. ASA 300[\\[2\\]](#_ftn3) includes additional requirements and guidance regarding activities prior to starting an initial audit.\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objective\n\n1.  In conducting an initial audit engagement, the objective of the auditor is to obtain sufficient appropriate audit evidence about whether:\n    1.  Opening balances contain misstatements that materially affect the current period’s financial report; and\n    2.  Appropriate accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\n##### Definitions\n\n1.  For the purposes of this Auditing Standard, the following terms have the meanings attributed below:\n    1.  Initial audit engagement means an engagement in which either:\n        1.  The financial report for the prior period was not audited; or\n        2.  The financial report for the prior period was audited by a predecessor auditor.\n    2.  Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.\n    3.  Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.\n\n##### Requirements\n\n###### Audit Procedures\n\nOpening Balances\n\n1.  The auditor shall read the most recent financial report, if any, and the predecessor auditor’s report thereon, if any, for information relevant to opening balances, including disclosures.\n2.  The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report by: (Ref: Para. A1‑A2)\n    1.  Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;\n    2.  Determining whether the opening balances reflect the application of appropriate accounting policies; and\n    3.  Performing one or more of the following: (Ref: Para. A3‑A7)\n        1.  Where the prior year financial report was audited, reviewing the predecessor auditor’s working papers to obtain evidence regarding the opening balances;\n        2.  Evaluating whether audit procedures performed in the current period provide evidence relevant to the opening balances; or\n        3.  Performing specific audit procedures to obtain evidence regarding the opening balances.\n3.  If the auditor obtains audit evidence that the opening balances contain misstatements that could materially affect the current period’s financial report, the auditor shall perform such additional audit procedures as are appropriate in the circumstances to determine the effect on the current period’s financial report. If the auditor concludes that such misstatements exist in the current period’s financial report, the auditor shall communicate the misstatements with the appropriate level of management and those charged with governance in accordance with ASA 450.[\\[3\\]](#_ftn4)\n\nConsistency of Accounting Policies\n\n1.  The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, and whether changes in the accounting policies have been appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\nRelevant Information in the Predecessor Auditor’s Report\n\n1.  If the prior period’s financial report was audited by a predecessor auditor and there was a modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification in assessing the risks of material misstatement in the current period’s financial report in accordance with ASA 315.[\\[4\\]](#_ftn5)\n\n###### Audit Conclusions and Reporting\n\nOpening Balances\n\n1.  If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.[\\[5\\]](#_ftn6) (Ref: Para. A8)\n2.  If the auditor concludes that the opening balances contain a misstatement that materially affects the current period’s financial report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate, in accordance with ASA 705.\n\nConsistency of Accounting Policies\n\n1.  If the auditor concludes that:\n    1.  the current period’s accounting policies are not consistently applied in relation to opening balances in accordance with the applicable financial reporting framework; or\n    2.  a change in accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with the applicable financial reporting framework,\n\nthe auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance with ASA 705.\n\nModification to the Opinion in the Predecessor Auditor’s Report\n\n1.  If the predecessor auditor’s opinion regarding the prior period’s financial report included a modification to the auditor’s opinion that remains relevant and material to the current period’s financial report, the auditor shall modify the auditor’s opinion on the current period’s financial report in accordance with ASA 705 and ASA 710. (Ref: Para. A9)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Audit Procedures\n\nConsiderations Specific to Public Sector Entities (Ref: Para. 6)\n\n1.  In the public sector, there may be legal or regulatory limitations on the information that the current auditor can obtain from a predecessor auditor. For example, if a public sector entity that has previously been audited by a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) is privatised, the amount of access to working papers or other information that the statutorily appointed auditor can provide a newly appointed auditor that is in the private sector may be constrained by privacy laws or regulations. In situations where such communications are constrained, audit evidence may need to be obtained through other means and, if sufficient appropriate audit evidence cannot be obtained, consideration given to the effect on the auditor’s opinion.\n2.  If the statutorily appointed auditor outsources an audit of a public sector entity to a private sector audit firm, and the statutorily appointed auditor appoints an audit firm other than the firm that audited the financial report of the public sector entity in the prior period, this is not usually regarded as a change in auditors for the statutorily appointed auditor. Depending on the nature of the outsourcing arrangement, however, the audit engagement may be considered an initial audit engagement from the perspective of the private sector auditor in fulfilling their responsibilities, and therefore this Auditing Standard applies.\n\nOpening Balances (Ref: Para. 6(c))\n\n1.  The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as:\n\n The accounting policies followed by the entity.\n\n The nature of the account balances, classes of transactions and disclosures and the risks of material misstatement in the current period’s financial report.\n\n The significance of the opening balances relative to the current period’s financial report.\n\n Whether the prior period’s financial report was audited and, if so, whether the predecessor auditor’s opinion was modified.\n\n1.  If the prior period’s financial report was audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor’s working papers. Whether such a review provides sufficient appropriate audit evidence is influenced by the professional competence and independence of the predecessor auditor.\n2.  Relevant ethical and professional requirements[](#_ftn7) guide the current auditor’s communications with the predecessor auditor.\n3.  For current assets and liabilities, some audit evidence about opening balances may be obtained as part of the current period’s audit procedures. For example, the collection (payment) of opening accounts receivable (accounts payable) during the current period will provide some audit evidence of their existence, rights and obligations, completeness and valuation at the beginning of the period. In the case of inventories, however, the current period’s audit procedures on the closing inventory balance provide little audit evidence regarding inventory on hand at the beginning of the period. Therefore, additional audit procedures may be necessary, and one or more of the following may provide sufficient appropriate audit evidence:\n\n Observing a current physical inventory count and reconciling it to the opening inventory quantities.\n\n Performing audit procedures on the valuation of the opening inventory items.\n\n Performing audit procedures on gross profit and cut‑off.\n\n1.  For non‑current assets and liabilities, such as property, plant and equipment, investments and long‑term debt, some audit evidence may be obtained by examining the accounting records and other information underlying the opening balances. In certain cases, the auditor may be able to obtain some audit evidence regarding opening balances through confirmation with third parties, for example, for long‑term debt and investments. In other cases, the auditor may need to carry out additional audit procedures.\n\n###### Audit Conclusions and Reporting\n\nOpening Balances (Ref: Para. 10-11)\n\n1.  ASA 705 establishes requirements and provides guidance on circumstances that may result in a modification to the auditor’s opinion on the financial report, the type of opinion appropriate in the circumstances, and the content of the auditor’s report when the auditor’s opinion is modified. The inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances may result in the following modifications to the opinion in the auditor’s report:\n    1.  A qualified opinion or a disclaimer of opinion, as is appropriate in the circumstances.\n    2.  \\[Deleted by the AUASB. Refer \\[Aus\\] Illustration 2A\\]\n\nAppendix 1 includes illustrative auditors’ reports.\n\nModification to the Opinion in the Predecessor Auditor’s Report (Ref: Para. 13)\n\n1.  In some situations, a modification to the predecessor auditor’s opinion may not be relevant and material to the opinion on the current period’s financial report. This may be the case where, for example, there was a scope limitation in the prior period, but the matter giving rise to the scope limitation has been resolved in the current period.","sortOrder":20},{"sectionNumber":"Audit Procedures","sectionType":"section","heading":"Audit Procedures","content":"###### Audit Procedures\n\nOpening Balances\n\n1.  The auditor shall read the most recent financial report, if any, and the predecessor auditor’s report thereon, if any, for information relevant to opening balances, including disclosures.\n2.  The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report by: (Ref: Para. A1‑A2)\n    1.  Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;\n    2.  Determining whether the opening balances reflect the application of appropriate accounting policies; and\n    3.  Performing one or more of the following: (Ref: Para. A3‑A7)\n        1.  Where the prior year financial report was audited, reviewing the predecessor auditor’s working papers to obtain evidence regarding the opening balances;\n        2.  Evaluating whether audit procedures performed in the current period provide evidence relevant to the opening balances; or\n        3.  Performing specific audit procedures to obtain evidence regarding the opening balances.\n3.  If the auditor obtains audit evidence that the opening balances contain misstatements that could materially affect the current period’s financial report, the auditor shall perform such additional audit procedures as are appropriate in the circumstances to determine the effect on the current period’s financial report. If the auditor concludes that such misstatements exist in the current period’s financial report, the auditor shall communicate the misstatements with the appropriate level of management and those charged with governance in accordance with ASA 450.[\\[3\\]](#_ftn4)\n\nConsistency of Accounting Policies\n\n1.  The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, and whether changes in the accounting policies have been appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\nRelevant Information in the Predecessor Auditor’s Report\n\n1.  If the prior period’s financial report was audited by a predecessor auditor and there was a modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification in assessing the risks of material misstatement in the current period’s financial report in accordance with ASA 315.[\\[4\\]](#_ftn5)","sortOrder":21},{"sectionNumber":"Audit Conclusions and Reporting","sectionType":"section","heading":"Audit Conclusions and Reporting","content":"###### Audit Conclusions and Reporting\n\nOpening Balances\n\n1.  If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.[\\[5\\]](#_ftn6) (Ref: Para. A8)\n2.  If the auditor concludes that the opening balances contain a misstatement that materially affects the current period’s financial report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate, in accordance with ASA 705.\n\nConsistency of Accounting Policies\n\n1.  If the auditor concludes that:\n    1.  the current period’s accounting policies are not consistently applied in relation to opening balances in accordance with the applicable financial reporting framework; or\n    2.  a change in accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with the applicable financial reporting framework,\n\nthe auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance with ASA 705.\n\nModification to the Opinion in the Predecessor Auditor’s Report\n\n1.  If the predecessor auditor’s opinion regarding the prior period’s financial report included a modification to the auditor’s opinion that remains relevant and material to the current period’s financial report, the auditor shall modify the auditor’s opinion on the current period’s financial report in accordance with ASA 705 and ASA 710. (Ref: Para. A9)\n\n\\* \\* \\*","sortOrder":22},{"sectionNumber":"Application and Other Explanatory Materi","sectionType":"section","heading":"Application and Other Explanatory Material","content":"Auditing Standard ASA 510\n\nThe Auditing and Assurance Standards Board (AUASB) made Auditing Standard ASA 510 Initial Audit Engagements‑Opening Balances pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001, on 27 October 2009.\n\nThis compiled version of ASA 510 incorporates subsequent amendments contained in other Auditing Standards made by the AUASB up to and including 15 March 2023 (see Compilation Details).\n\n## Auditing Standard ASA 510\n\n### Initial Audit Engagements‑Opening Balances\n\n##### Application\n\nAus 0.1 This Auditing Standard applies to:\n\n(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and\n\n(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.\n\nAus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.\n\n##### Operative Date\n\nAus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 1 January 2010. \\[Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.\\]\n\n##### Introduction\n\n###### Scope of this Auditing Standard\n\n1.  This Auditing Standard deals with the auditor’s responsibilities relating to opening balances in an initial audit engagement. In addition to financial statement amounts, opening balances include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments. When the financial report includes comparative financial information, the requirements and guidance in ASA 710[\\[1\\]](#_ftn2) also apply. ASA 300[\\[2\\]](#_ftn3) includes additional requirements and guidance regarding activities prior to starting an initial audit.\n\n###### Effective Date\n\n1.  \\[Deleted by the AUASB. Refer Aus 0.3\\]\n\n##### Objective\n\n1.  In conducting an initial audit engagement, the objective of the auditor is to obtain sufficient appropriate audit evidence about whether:\n    1.  Opening balances contain misstatements that materially affect the current period’s financial report; and\n    2.  Appropriate accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, or changes thereto are appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\n##### Definitions\n\n1.  For the purposes of this Auditing Standard, the following terms have the meanings attributed below:\n    1.  Initial audit engagement means an engagement in which either:\n        1.  The financial report for the prior period was not audited; or\n        2.  The financial report for the prior period was audited by a predecessor auditor.\n    2.  Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.\n    3.  Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.\n\n##### Requirements\n\n###### Audit Procedures\n\nOpening Balances\n\n1.  The auditor shall read the most recent financial report, if any, and the predecessor auditor’s report thereon, if any, for information relevant to opening balances, including disclosures.\n2.  The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report by: (Ref: Para. A1‑A2)\n    1.  Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;\n    2.  Determining whether the opening balances reflect the application of appropriate accounting policies; and\n    3.  Performing one or more of the following: (Ref: Para. A3‑A7)\n        1.  Where the prior year financial report was audited, reviewing the predecessor auditor’s working papers to obtain evidence regarding the opening balances;\n        2.  Evaluating whether audit procedures performed in the current period provide evidence relevant to the opening balances; or\n        3.  Performing specific audit procedures to obtain evidence regarding the opening balances.\n3.  If the auditor obtains audit evidence that the opening balances contain misstatements that could materially affect the current period’s financial report, the auditor shall perform such additional audit procedures as are appropriate in the circumstances to determine the effect on the current period’s financial report. If the auditor concludes that such misstatements exist in the current period’s financial report, the auditor shall communicate the misstatements with the appropriate level of management and those charged with governance in accordance with ASA 450.[\\[3\\]](#_ftn4)\n\nConsistency of Accounting Policies\n\n1.  The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies reflected in the opening balances have been consistently applied in the current period’s financial report, and whether changes in the accounting policies have been appropriately accounted for and adequately presented and disclosed in accordance with the applicable financial reporting framework.\n\nRelevant Information in the Predecessor Auditor’s Report\n\n1.  If the prior period’s financial report was audited by a predecessor auditor and there was a modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification in assessing the risks of material misstatement in the current period’s financial report in accordance with ASA 315.[\\[4\\]](#_ftn5)\n\n###### Audit Conclusions and Reporting\n\nOpening Balances\n\n1.  If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances, the auditor shall express a qualified opinion or disclaim an opinion on the financial report, as appropriate, in accordance with ASA 705.[\\[5\\]](#_ftn6) (Ref: Para. A8)\n2.  If the auditor concludes that the opening balances contain a misstatement that materially affects the current period’s financial report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse opinion, as appropriate, in accordance with ASA 705.\n\nConsistency of Accounting Policies\n\n1.  If the auditor concludes that:\n    1.  the current period’s accounting policies are not consistently applied in relation to opening balances in accordance with the applicable financial reporting framework; or\n    2.  a change in accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with the applicable financial reporting framework,\n\nthe auditor shall express a qualified opinion or an adverse opinion as appropriate in accordance with ASA 705.\n\nModification to the Opinion in the Predecessor Auditor’s Report\n\n1.  If the predecessor auditor’s opinion regarding the prior period’s financial report included a modification to the auditor’s opinion that remains relevant and material to the current period’s financial report, the auditor shall modify the auditor’s opinion on the current period’s financial report in accordance with ASA 705 and ASA 710. (Ref: Para. A9)\n\n\\* \\* \\*\n\n##### Application and Other Explanatory Material\n\n###### Audit Procedures\n\nConsiderations Specific to Public Sector Entities (Ref: Para. 6)\n\n1.  In the public sector, there may be legal or regulatory limitations on the information that the current auditor can obtain from a predecessor auditor. For example, if a public sector entity that has previously been audited by a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) is privatised, the amount of access to working papers or other information that the statutorily appointed auditor can provide a newly appointed auditor that is in the private sector may be constrained by privacy laws or regulations. In situations where such communications are constrained, audit evidence may need to be obtained through other means and, if sufficient appropriate audit evidence cannot be obtained, consideration given to the effect on the auditor’s opinion.\n2.  If the statutorily appointed auditor outsources an audit of a public sector entity to a private sector audit firm, and the statutorily appointed auditor appoints an audit firm other than the firm that audited the financial report of the public sector entity in the prior period, this is not usually regarded as a change in auditors for the statutorily appointed auditor. Depending on the nature of the outsourcing arrangement, however, the audit engagement may be considered an initial audit engagement from the perspective of the private sector auditor in fulfilling their responsibilities, and therefore this Auditing Standard applies.\n\nOpening Balances (Ref: Para. 6(c))\n\n1.  The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as:\n\n The accounting policies followed by the entity.\n\n The nature of the account balances, classes of transactions and disclosures and the risks of material misstatement in the current period’s financial report.\n\n The significance of the opening balances relative to the current period’s financial report.\n\n Whether the prior period’s financial report was audited and, if so, whether the predecessor auditor’s opinion was modified.\n\n1.  If the prior period’s financial report was audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor’s working papers. Whether such a review provides sufficient appropriate audit evidence is influenced by the professional competence and independence of the predecessor auditor.\n2.  Relevant ethical and professional requirements[](#_ftn7) guide the current auditor’s communications with the predecessor auditor.\n3.  For current assets and liabilities, some audit evidence about opening balances may be obtained as part of the current period’s audit procedures. For example, the collection (payment) of opening accounts receivable (accounts payable) during the current period will provide some audit evidence of their existence, rights and obligations, completeness and valuation at the beginning of the period. In the case of inventories, however, the current period’s audit procedures on the closing inventory balance provide little audit evidence regarding inventory on hand at the beginning of the period. Therefore, additional audit procedures may be necessary, and one or more of the following may provide sufficient appropriate audit evidence:\n\n Observing a current physical inventory count and reconciling it to the opening inventory quantities.\n\n Performing audit procedures on the valuation of the opening inventory items.\n\n Performing audit procedures on gross profit and cut‑off.\n\n1.  For non‑current assets and liabilities, such as property, plant and equipment, investments and long‑term debt, some audit evidence may be obtained by examining the accounting records and other information underlying the opening balances. In certain cases, the auditor may be able to obtain some audit evidence regarding opening balances through confirmation with third parties, for example, for long‑term debt and investments. In other cases, the auditor may need to carry out additional audit procedures.\n\n###### Audit Conclusions and Reporting\n\nOpening Balances (Ref: Para. 10-11)\n\n1.  ASA 705 establishes requirements and provides guidance on circumstances that may result in a modification to the auditor’s opinion on the financial report, the type of opinion appropriate in the circumstances, and the content of the auditor’s report when the auditor’s opinion is modified. The inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances may result in the following modifications to the opinion in the auditor’s report:\n    1.  A qualified opinion or a disclaimer of opinion, as is appropriate in the circumstances.\n    2.  \\[Deleted by the AUASB. Refer \\[Aus\\] Illustration 2A\\]\n\nAppendix 1 includes illustrative auditors’ reports.\n\nModification to the Opinion in the Predecessor Auditor’s Report (Ref: Para. 13)\n\n1.  In some situations, a modification to the predecessor auditor’s opinion may not be relevant and material to the opinion on the current period’s financial report. This may be the case where, for example, there was a scope limitation in the prior period, but the matter giving rise to the scope limitation has been resolved in the current period.","sortOrder":23},{"sectionNumber":"Illustrations of Auditors’ Reports with ","sectionType":"subdivision","heading":"Illustrations of Auditors’ Reports with Modified Opinions","content":"#### Illustrations of Auditors’ Reports with Modified Opinions\n\n Illustration 1: An auditor’s report containing a qualified opinion due to the inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances—the financial report is not prepared under the Corporations Act 2001.\n\n Illustration 2: \\[Example Auditor’s Report deleted by the AUASB—not applicable in Australia.\\]\n\n \\[Aus\\] Illustration 2A: An auditor’s report containing a qualified opinion due to the inability of the auditor to obtain sufficient appropriate audit evidence regarding opening balances—the financial report is prepared under the Corporations Act 2001.\n\nNote: Throughout these illustrative auditor’s reports, the Opinion section has been positioned first in accordance with ASA 700, and the Basis for Opinion section is positioned immediately after the Opinion section. Also, the first and last sentence that was included in the extant auditor’s responsibilities section is now subsumed as part of the new Basis for Opinion section.\n\n  \n\nExample Auditor’s Report  \nQualified Opinion—Jurisdiction Prohibits a Qualified Opinion on Performance and Cash Flows and an Unmodified Opinion on Financial Position\n\n(Fair Presentation Framework)\n\nIllustration 1:\n\nFor purposes of this illustrative auditor’s report, the following circumstances are assumed:\n\n Audit of the financial report of an entity other than a listed entity. The audit is not a group audit (i.e., ASA 600[\\[6\\]](#_ftn8) does not apply).\n\n The financial report is prepared by management of the entity in accordance with Australian Accounting Standards (a general purpose framework). The financial report is not prepared under the Corporations Act 2001.\n\n The terms of the audit engagement reflect the description of management’s responsibility for the financial report in ASA 210.[\\[7\\]](#_ftn9)\n\n The auditor did not observe the counting of the physical inventory at the beginning of the current period and was unable to obtain sufficient appropriate audit evidence regarding the opening balances of inventory.\n\n The possible effects of the inability to obtain sufficient appropriate audit evidence regarding opening balances of inventory are deemed to be material but not pervasive to the entity’s financial performance and cash flows.[\\[8\\]](#_ftn10)\n\n The financial position at year end is fairly presented.\n\n In this jurisdiction, law and regulation prohibit the auditor from giving an opinion which is qualified regarding the financial performance and cash flows and unmodified regarding financial position.\n\n The relevant ethical requirements that apply to the audit are the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards).\n\n Based on the audit evidence obtained, the auditor has concluded that a material uncertainty does not exist related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern in accordance with ASA 570.[\\[9\\]](#_ftn11)\n\n The auditor is not required, and has otherwise not decided, to communicate key audit matters in accordance with ASA 701.[\\[10\\]](#_ftn12)\n\n Corresponding figures are presented, and the prior period’s financial report was audited by a predecessor auditor. The auditor is not prohibited by law or regulation from referring to the predecessor auditor’s report on the corresponding figures and has decided to do so.\n\n Those responsible for oversight of the financial report differ from those responsible for the preparation of the financial report.\n\n The auditor has obtained all of the other information prior to the date of the auditor’s report and has not identified a material misstatement of the other information.[\\[\\*\\]](#_ftn13)\n\n In addition to the audit of the financial report, the auditor has other reporting responsibilities required under local law.\n\n  \n\nINDEPENDENT AUDITOR’S REPORT\n\nTo the Members of ABC Entity \\[or Other Appropriate Addressee\\]","sortOrder":26},{"sectionNumber":"Report on the Audit of the Financial Rep","sectionType":"section","heading":"Report on the Audit of the Financial Report[11]","content":"###### Report on the Audit of the Financial Report[\\[11\\]](#_ftn14)\n\nQualified Opinion\n\nWe have audited the financial report of ABC Entity (the Entity), which comprises the statement of financial position as at 30 June 20X1, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, and the declaration by those charged with governance.[](#_ftn15)\n\nIn our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial report presents fairly, in all material respects, (or gives a true and fair view of) the financial position of the Entity as at 30 June 20X1, and (of) its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards.\n\nBasis for Qualified Opinion\n\nWe were appointed as auditors of the Entity on 31 December 20X0 and thus did not observe the counting of the physical inventories at the beginning of the year. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at 30 June 20X0. Since opening inventories enter into the determination of the financial performance and cash flows, we were unable to determine whether adjustments might have been necessary in respect of the income for the year reported in the statement of comprehensive income and the net cash flows from operating activities reported in the statement of cash flows.\n\nWe conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Entity in accordance with the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.\n\nOther Information \\[or another title if appropriate such as “Information Other than the Financial Report and Auditor’s Report Thereon”\\]\n\n\\[Reporting in accordance with the reporting requirements in ASA 720 – see \\[Aus\\] Illustration 6A in Appendix 3 of ASA 720.[\\[#\\]](#_ftn16)\\]\n\nOther Matter\n\nThe financial report of the Entity for the year ended 30 June 20X0 was audited by another auditor who expressed an unmodified opinion on the financial report on 30 September 20X0.\n\nResponsibilities of Management and Those Charged with Governance for the Financial Report[\\[12\\]](#_ftn17)\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\nAuditor’s Responsibilities for the Audit of the Financial Report\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\nReport on Other Legal and Regulatory Requirements\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\n\\[Signature\\][](#_ftn18)\n\n\\[Date of the auditor’s report\\][](#_ftn19)\n\n\\[Auditor’s address\\]\n\n  \nExample Auditor’s Report  \nAn Opinion that is Qualified Regarding the Financial Performance and Cash Flows and Unmodified Regarding Financial Position\n\nIllustration 2:\n\n \\[Example Auditor’s Report deleted by the AUASB\\]—not applicable in Australia.\n\n Refer ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards, paragraph 11(a).\n\n The Corporation Act 2001 does not provide for split opinions.[\\[\\*\\]](#_ftn20)\n\n  \nExample Auditor’s Report  \nQualified Opinion—Jurisdiction Prohibits a Qualified Opinion on Performance and Cash Flows and an Unmodified Opinion on Financial Position  \nCorporations Act 2001\n\n(Fair Presentation Framework)\n\n\\[Aus\\] Illustration 2A:\n\nFor purposes of this illustrative auditor’s report, the following circumstances are assumed:\n\n Audit of the financial report of a single listed company. The audit is not a group audit (i.e., ASA 600[\\[13\\]](#_ftn21) does not apply).\n\n The financial report is prepared by the directors of the company in accordance with Australian Accounting Standards (a general purpose framework) and under the Corporations Act 2001.\n\n The terms of the audit engagement reflect the description of the directors responsibility for the financial report in ASA 210.[\\[14\\]](#_ftn22)\n\n The auditor did not observe the counting of the physical inventory at the beginning of the current period and was unable to obtain sufficient appropriate audit evidence regarding the opening balances of inventory.\n\n The possible effects of the inability to obtain sufficient appropriate audit evidence regarding opening balances of inventory are deemed to be material but not pervasive to the entity’s financial performance and cash flows.\n\n The financial position at year end is fairly presented.\n\n In this jurisdiction, law and regulation prohibit the auditor from giving an opinion which is qualified regarding the financial performance and cash flows and unmodified regarding financial position.\n\n The relevant ethical requirements that apply to the audit are the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards).\n\n Based on the audit evidence obtained, the auditor has concluded that a material uncertainty does not exist related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern in accordance with ASA 570.[\\[15\\]](#_ftn23)\n\n Key audit matters have been communicated in accordance with ASA 701.[\\[16\\]](#_ftn24)\n\n Corresponding figures are presented, and the prior period’s financial report was audited by a predecessor auditor. The auditor is not prohibited by law or regulation from referring to the predecessor auditor’s report on the corresponding figures and has decided to do so.\n\n The auditor has obtained all of the other information prior to the date of the auditor’s report and has not identified a material misstatement of the other information.[\\[\\*\\]](#_ftn25)\n\n In addition to the audit of the financial report, the auditor has other reporting responsibilities required under section 308(3C) of the Corporations Act 2001.\n\nINDEPENDENT AUDITOR’S REPORT\n\n\\[Appropriate Addressee\\]\n\nReport on the Audit of the Financial Report[](#_ftn26)\n\nQualified Opinion\n\nWe have audited the financial report of ABC Company Ltd., (the Company), which comprises the statement of financial position as at 30 June 20X1, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information, and the directors’ declaration.\n\nIn our opinion, except for the possible effects of the matter described in the Basis for Qualified Opinion section of our report, the accompanying financial report of ABC Company Ltd., is in accordance with the Corporations Act 2001, including:\n\n1.  giving a true and fair view of the company’s financial position as at 30 June 20X1 and of its financial performance for the year then ended; and\n2.  complying with Australian Accounting Standards and the Corporations Regulations 2001.\n\nBasis for Qualified Opinion\n\nWe were appointed as auditors of the company on 31 December 20X0 and thus did not observe the counting of the physical inventories at the beginning of the year. We were unable to satisfy ourselves by alternative means concerning inventory quantities held at 30 June 20X0. Since opening inventories enter into the determination of the financial performance and cash flows, we were unable to determine whether adjustments might have been necessary in respect of the income for the year reported in the statement of comprehensive income and the net cash flows from operating activities reported in the statement of cash flows.\n\nWe conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.\n\nWe confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company would be in the same terms if given to the directors as at the time of this auditor’s report.[\\[#\\]](#_ftn27)\n\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.\n\nKey Audit Matters\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\nOther Information \\[or another title if appropriate such as “Information Other than the Financial Report and Auditor’s Report Thereon”\\]\n\n\\[Reporting in accordance with the reporting requirements in ASA 720 – see \\[Aus\\] Illustration 6A in Appendix 3 of ASA 720.[\\[†\\]](#_ftn28)\\]\n\nOther Matter\n\nThe financial report of the Company for the year ended 30 June 20X0 was audited by another auditor who expressed an unmodified opinion on the financial report on 30 September 20X0.\n\nResponsibilities of the Directors for the Financial Report\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\nAuditor’s Responsibilities for the Audit of the Financial Report\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\nReport on the Remuneration Report[](#_ftn29)\n\n\\[Reporting in accordance with ASA 700 – see \\[Aus\\] Illustration 1A in the Appendix of ASA 700.\\]\n\n\\[Auditor’s name and signature\\][](#_ftn30)\n\n\\[Name of Firm\\]\n\n\\[Date of the auditor’s report\\][\\[§\\]](#_ftn31)\n\n\\[Auditor’s address\\]","sortOrder":27}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"kimi_summary":{"_metrics":{"completionTokens":646},"content_quality":"ok","complexity_score":5,"scope_assessment":{"changed":false,"description":"The standard has remained focused on its original purpose: auditor responsibilities for opening balances in initial audit engagements. While amended five times (2015, 2020 x2, 2023), these updates have been technical refinements to reporting formats and cross-references rather than expansion of scope. The core requirements in paragraphs 5-13 and A1-A9 remain substantively unchanged since 2009."},"complexity_factors":["Multiple cross-references to other ASA standards (ASA 101, 200, 210, 300, 315, 450, 570, 600, 700, 701, 705, 710, 720)","Conditional logic requiring professional judgment (e.g., 'as appropriate in the circumstances', 'if...then')","Australian-specific modifications ('Aus' paragraphs) layered over international base standard","Five amending standards with staggered operative dates creating version complexity","Public sector carve-outs with separate considerations for statutory auditors vs private firms","Illustrative report templates with extensive footnotes and alternative scenarios","Definitions section with three interdependent defined terms"],"plain_english_summary":"ASA 510 tells auditors taking on a new client how to obtain and evaluate evidence about opening balances carried forward from the prior period. It applies when prior-year figures weren’t audited or a different auditor handled them, and requires procedures to confirm balances, accounting policy consistency, and absence of material misstatements. It matters because incorrect opening balances can taint the current year’s statements, and insufficient evidence may lead to a qualified, adverse, or disclaimer opinion."},"flash_summary":{"complexity_score":3,"scope_assessment":{"changed":false,"description":"The Standard continues to focus on auditor responsibilities for opening balances in initial audit engagements. Amendments and Aus paragraphs clarify application (including public‑sector constraints), operative dates and illustrative report formats, but do not redefine the core scope as described in the Scope and Objective sections."},"complexity_factors":["Requires professional judgement on what constitutes \"sufficient appropriate audit evidence\" (see Audit Procedures paras 5–9).","Cross‑references to multiple other AUASB Standards (ASA 705, ASA 710, ASA 300, ASA 315, ASA 450) creating interdependent obligations.","Interactions with predecessor auditors (access to working papers, competence and independence considerations) and legal/regulatory constraints in the public sector (Application/Explanatory Material).","Potential need for varied, specific audit procedures depending on asset/liability type (e.g. inventories vs long‑term debt) and for third‑party confirmations (Explanatory Material).","Reporting permutations (qualified, adverse, disclaimer) depend on factual findings and legal context (Audit Conclusions paras 10–13; Appendix illustrations).","Multiple amending standards over time add interpretive history (Compilation Details and Table of Amendments)."],"plain_english_summary":"This Auditing Standard requires auditors in an initial engagement to obtain sufficient appropriate evidence about opening balances and the consistency of accounting policies, and to modify their audit opinion if evidence is lacking or balances are misstated (Requirements: Audit Procedures paras 5–9; Audit Conclusions paras 10–13). It affects auditors, predecessor auditors and audited entities by setting procedures, reporting outcomes and evidentiary expectations, including limits where public‑sector confidentiality or prior modified opinions constrain access to information."}},"importantCases":[],"_links":{"self":"/api/acts/asa-510-initial-audit-engagements-opening-balances-october-2009","history":"/api/acts/asa-510-initial-audit-engagements-opening-balances-october-2009/history","analysis":"/api/acts/asa-510-initial-audit-engagements-opening-balances-october-2009/analysis","conflicts":"/api/acts/asa-510-initial-audit-engagements-opening-balances-october-2009/conflicts","importantCases":"/api/acts/asa-510-initial-audit-engagements-opening-balances-october-2009/important-cases","documents":"/api/acts/asa-510-initial-audit-engagements-opening-balances-october-2009/documents"}}