Applying AUASB StandardsApplying AUASB Standards

Applying AUASB Standards

Professional Judgement

1. AUASB Standards are principles-based and the auditor is expected to use professional judgement in light of the given circumstances in order to achieve the objectives of the audit, review or other assurance engagement. Professional judgement is exercised:
   1. in applying relevant mandatory requirements;
   2. in determining whether any of the exceptions, described in paragraph 11 of this Preamble, apply; and
   3. in deciding how and whether to carry out procedures or actions, described in explanatory guidance, in light of the circumstances and consistent with the objectives of the Standards.
2. The use of professional judgement is required and applies in particular to:
   1. the determination and application of materiality;
   2. compliance with ethical requirements relevant to audit and review engagements;
   3. the selection and scope of appropriate audit/review procedures;
   4. the assessment and evaluation of available options and results, including the persuasiveness of audit/review evidence; and
   5. the extent of documentation of audit/review plans, procedures, results, conclusions and communications.

Ethics

1. The AUASB takes the view that inclusion in AUASB Standards of references to relevant ethical requirements is important to:
   1. ensure a high level of public confidence in the audit and review functions;
   2. enhance the rigour of AUASB Standards; and
   3. ensure conformity between AUASB Standards and the Standards issued by IAASB.

Accordingly, references to compliance with relevant ethical requirements are included in certain mandatory requirements and explanatory guidance paragraphs in AUASB Standards.

1. The auditor is subject to relevant ethical requirements, including those pertaining to independence, relating to audit engagements as defined in ASA 102.