Conformity with International Standards Conformity with International Standards on Auditing

Conformity with International Standards on Auditing

This Auditing Standard conforms with International Standard on Auditing ISA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor's Report, issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard-setting board of the International Federation of Accountants (IFAC).

Paragraphs 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”.

The following requirements are additional to ISA 706:

 In addition to the requirements in paragraph 6 of this Auditing Standard, the auditor shall include an Emphasis of Matter paragraph in the auditor’s report where required by other Auditing Standards. (Ref: Para. Aus 6.1)

 When the financial report has been prepared in accordance with Australian Accounting Standards but additional disclosures have been made in the financial report:

♦ on the basis that, or which imply that, application of a particular Accounting Standard has resulted in the financial report being potentially misleading; or

♦ that, in the opinion of those charged with governance, are necessary to present a true and fair view; and

the auditor is of the opinion that:

♦ it is likely, in the absence of the additional disclosures, that users would be misled when making evaluations or decisions about the allocation of scarce resources; and

♦ the additional disclosures contain all, and only, relevant and reliable information, and are presented in such a manner as to ensure the financial report as a whole is comparable and understandable in meeting the objectives of the financial report,

the auditor shall include in the auditor’s report an Emphasis of Matter paragraph headed "Application of Australian Accounting Standard AASB ..." or an appropriate alternative which:

♦ draws attention to the additional disclosures;

♦ where relevant, states that in the auditor's opinion application of the particular Accounting Standard has, in this instance, resulted in the financial report being potentially misleading;

♦ states the specific reasons why the auditor believes the additional disclosures are necessary to ensure the financial report as a whole is not misleading (the auditor's reasons are to be stated in the auditor’s report itself rather than only by reference to the reasons included in the financial report); and

♦ states that, in the auditor's opinion, the additional disclosures are relevant and reliable in meeting the objectives of the financial report. (Ref: Para Aus 7.1)

 In addition to the requirements in paragraph 8 of this Auditing Standard, the auditor shall include an Other Matter paragraph in the auditor’s report where required by other Auditing Standards.
(Ref: Para. Aus 8.1)

Compliance with this Auditing Standard enables compliance with ISA 706.