The purpose of this Auditing Standard is to set out mandatory components additional to those included elsewhere in the Australian Auditing Standards that are operative for:
financial reporting periods commencing on or after 1 January 2010; and
firms required to establish systems of quality control by 1 January 2010.
ASA 100 Preamble to AUASB Standards applies to all AUASB Standards other than the Australian Auditing Standards referred to in paragraph 5 of this Auditing Standard.
Objective
The objective of the auditor and the firm is to use this Auditing Standard in order to understand, interpret and apply the Australian Auditing Standards that are operative for engagements with financial reporting periods commencing on or after 1 January 2010; and for firms required to establish systems of quality control by 1 January 2010.
Definitions
For purposes of the Australian Auditing Standards, the following terms have the meanings attributed below:
(a) Auditing Standards means auditing standards made under section 336 of the Corporations Act 2001 (the “Act”), and include:
(i) ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements; and
(ii) ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity.
(b) Australian Auditing Standards means the suite of auditing standards issued by the AUASB, comprising:
Auditing Standards made under section 336 of the Corporations Act 2001;
ASA 805 Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; and
ASA 810 Engagements to Report on Summary Financial Statements.
Requirements
Authority of the Paragraphs in Australian Auditing Standards
The auditor shall apply the mandatory components of the Australian Auditing Standards when conducting an audit or review in accordance with those Standards. The mandatory components are included in each Auditing Standard under the headings listed below:
(i) Application (paragraph Aus 0.1).
(ii) Operative Date.
(iii) Objective(s).
(iv) Definition(s).
(v) Requirements.
The auditor shall consider the whole text of an Auditing Standard to understand, interpret and apply the mandatory components. The explanatory material is included in each Auditing Standard under the headings listed below:
Section Application and Other Explanatory Materi - ASA 101 - Preamble to Australian Auditing Standards - October 2009 - Application and Other Explanatory Material | Zoe
(i) Application (paragraph Aus 0.2).
(ii) Introduction.
(iii) Application and Other Explanatory Material.
(iv) Conformity with International Standards on Auditing.
(v) Appendices.
Explanatory material does not create or extend mandatory components. (Ref: Para. A1)
Engagements under the Corporations Act 2001
The “Application” paragraph in each Auditing Standard that refers to audits or reviews conducted in accordance with the Corporations Act 2001 applies specifically to:
(a) an audit or a review conducted under Part 2M.3 of the Act; and
(b) an audit conducted under Part 7.8 of the Act.
Compliance with Requirements
When, in the circumstances of the audit, a requirement is not relevant due to the conditions described in ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards, the auditor is not required to document the reason(s) why the requirement is not relevant. (Ref: Para. A2)
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Application and Other Explanatory Material
Authority of the Paragraphs in Australian Auditing Standards
(Ref: Para. 10)
Included within the requirements section of a standard are references to paragraphs in the “Application and Other Explanatory Material” section of the standard. Such references do not extend or create requirements.
Compliance with Requirements (Ref: Para. 12)
Under paragraph 12, an auditor need not document the reasons why a requirement is not relevant. However, where in rare and exceptional circumstances, factors outside the auditor’s control prevent the auditor from complying with an essential procedure contained within a relevant requirement, the auditor is required under ASA 230 or ASRE 2410[2], as applicable, to document:
(a) the circumstances surrounding the inability to comply;
(b) the reasons for the inability to comply; and
(c) justification of how alternative procedures achieve the objectives of the requirement.
Conformity with International Standards on Auditing
This Auditing Standard relates to the Australian legislative environment and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board of the International Federation of Accountants (IFAC).
Compliance with this Auditing Standard enables compliance with the ISAs.