Material Inconsistencies
- If, on reading the other information, the auditor identifies a material inconsistency, the auditor shall determine whether the audited financial report or the other information needs to be revised.
Material Inconsistencies Identified in Other Information Obtained Prior to the Date of the Auditor’s Report
- If revision of the audited financial report is necessary and management refuses to make the revision, the auditor shall modify the opinion in the auditor’s report in accordance with ASA 705.[2]
- If revision of the other information is necessary and management refuses to make the revision, the auditor shall communicate this matter to those charged with governance, unless all of those charged with governance are involved in managing the entity;[3] and
- Include in the auditor’s report an Other Matter(s) paragraph describing the material inconsistency in accordance with ASA 706;[4] or
- Withhold the auditor’s report; or
- Withdraw from the engagements, where withdrawal is possible under applicable law or regulation.
(Ref: Para. A6-A7)
Aus 10.1 Withholding the auditor’s report is not permitted under the Corporations Act 2001.
Material Inconsistencies Identified in Other Information Obtained Subsequent to the Date of the Auditor’s Report
- If revision of the audited financial report is necessary, the auditor shall follow the relevant requirements in ASA 560.[5]
- If revision of the other information is necessary and management agrees to make the revision, the auditor shall carry out the procedures necessary under the circumstances. (Ref: Para. A8)
- If revision of the other information is necessary, but management refuses to make the revision, the auditor shall notify those charged with governance, unless all of those charged with governance are involved in managing the entity, of the auditor’s concern regarding the other information and take any further appropriate action. (Ref: Para. A9)