Main changes from AUS 508 (July 2002 InqMain changes from AUS 508 (July 2002 Inquiry Regarding Litigation and Claims)

Main changes from AUS 508 (July 2002 Inquiry Regarding Litigation and Claims)

The main differences between this Auditing Standard and the Auditing Standard issued by the Auditing & Assurance Standards Board of the Australian Accounting Research Foundation, AUS 508 (July 2002) Inquiry Regarding Litigation and Claims, are that in this Auditing Standard:

1. The word ‘shall’, in the bold-type paragraphs, is the terminology used to describe an auditor’s mandatory requirements, whereas an auditor’s degree of responsibility is described in AUS 508 by the word ‘should’.and
2. The explanatory guidance paragraphs provide guidance and illustrative examples to assist the auditor in fulfilling the mandatory requirements, whereas in AUS 508 some obligations are implied within certain explanatory paragraphs. Accordingly, these paragraphs have been amended to clarify that these matters form part of the explanatory guidance.
3. This Auditing Standard includes explanatory guidance, not included in AUS 508, regarding circumstances when it may be difficult to either obtain a representation letter or be provided with information about legal matters from the entity’s lawyers, and alternative audit procedures that the auditor may consider in such circumstances (paragraphs 27 and 28)..

AUTHORITY STATEMENT

The Auditing and Assurance Standards Board (AUASB) makes Auditing Standard 508 Enquiry Regarding Litigation and Claims as set out in paragraphs 1 to 38 and Appendix 1, pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.

This Auditing Standard is to be read in conjunction with the Preamble to AUASB Standards, which sets out the intentions of the AUASB on how the Auditing Standards are to be understood, interpreted and applied.

The mandatory requirements of this Auditing Standard are set out in bold-type paragraphs.

Dated 28 April 2006 M H Kelsall
Chairman - AUASB