AUASB Repeal of Superseded Auditing Standards 2020

Repeal in the context of this instrument means the formal revocation of a legislative instrument as a matter of law. Once repealed, the instrument ceases to have effect for future periods, subject to any savings provision. The instrument uses the term "repealed" in subsection 4(1), consistent with the Acts Interpretation Act 1901 and the Legislation Act 2003, which govern the effect of repeals of legislative instruments. The repeal does not revive any earlier instrument; it simply removes the listed instrument from the current corpus of auditing standards.

Superseded instruments are auditing standards that have been replaced by a later version addressing the same subject matter. The table in Schedule 1 pairs each superseded instrument (Column 1) with the instrument that superseded it (Column 2). The phrase "superseded" is not defined in the instrument itself, but refers to standards that the AUASB has determined are no longer current. The instrument is therefore a codification of the AUASB's own view of when replacement occurred. The transition date for each pair is the date the Column 2 instrument started to apply under subsection 336(3) of the Corporations Act 2001. That subsection provides that an auditing standard takes effect on the day specified in the instrument, which is typically at least 12 months after its making to allow for implementation. The instrument assumes that the Column 1 standard applied up to the day before the Column 2 standard became effective.

Savings provision is found in subsection 4(2). It preserves the legal force of the repealed instrument for periods ending before the replacement started to apply. This is a standard transitional device to avoid an unintentional lacuna. Without it, any audit report signed after the repeal date but covering a period before the new standard took effect would arguably have no prescribed auditing standard. The savings provision ensures continuity of legal obligation. It also means that the repealed instruments remain relevant for historical audits and may need to be consulted in litigation or regulatory review of past work.

Auditing standards are legislative instruments made by the AUASB under the Corporations Act 2001 and the ASIC Act 2001. They have the force of law for audits conducted under the Corporations Act. Section 307A of the Corporations Act 2001 requires an auditor to conduct an audit in accordance with auditing standards. The standards set out the procedures, documentation and reporting requirements. The AUASB is an independent statutory body responsible for setting these standards, and its instruments are subject to parliamentary disallowance. The instrument being analysed is itself an AUASB legislative instrument that modifies the set of operative standards.

Legislative instrument status means that the repeal is subject to the Legislation Act 2003, including registration, tabling and disallowance. The instrument was registered on the Federal Register of Legislation (presumably on 11 November 2020 or shortly thereafter, as it commences the day after registration). The FRL identifiers in the Schedule correspond to the unique registration numbers assigned to each instrument.

The primary direct effect is on the AUASB itself, as the instrument cleans its own rulebook. However, the practical impact is felt by several categories of stakeholders.

Auditors and audit firms are the most obviously affected group. For current and future engagements, they must ensure they apply the most recent version of each standard as reflected by the Column 2 instruments. Any audit methodology or quality control manual that references the repealed Column 1 instruments must be updated. For audits of periods that ended before the Column 2 instrument applied, the repealed standard remains the relevant legal requirement. This distinction matters when an audit report is issued after the repeal date but covers an earlier period. An auditor might inadvertently apply the new standard to a period to which it does not legally apply, creating a potential technical non-compliance with the Corporations Act if the new standard differs in a substantive way.

Companies and other entities subject to an audit under the Corporations Act 2001 are affected indirectly. The applicable auditing standard determines the scope, procedures and reporting obligations of the auditor. A company’s directors and audit committee need to know which version of a standard governs the audit of each financial period, particularly for interim reviews. The repeal of superseded standards does not change any substantive obligation for the company itself, but it clarifies the legal framework that the auditor must follow. For historical periods, the savings provision means that a company cannot argue that a superseded standard no longer applies to the audit of that period simply because the standard has been repealed.

ASIC as the corporate regulator relies on auditing standards in its enforcement and surveillance activities. ASIC’s audit inspection program, financial reporting surveillance and any legal proceedings will reference the operative standard for the relevant period. The instrument removes ambiguity by formally confirming which standards are no longer current for future periods, but the savings provision means ASIC must still refer to the repealed instruments when reviewing audits of earlier periods. ASIC staff will need to maintain access to the archived versions.

Courts and tribunals hearing cases involving alleged audit negligence or breach of statutory duty may need to determine the applicable standard for the period in question. The instrument's savings provision provides a clear statutory rule: the Column 1 instrument continues to apply for periods ending before the Column 2 instrument started to apply. This reduces the scope for dispute about which standard governs. However, if the replacement instrument differs in its wording, a court might still need to interpret the effect of those differences.

Users of audited financial reports, including investors, lenders and analysts, rely on the assurance provided by an audit. The uniformity and currency of auditing standards underpin that assurance. The instrument ensures that only current standards are invoked for forward-looking audits, reducing the risk that an auditor uses an outdated methodology. Nonetheless, for historical financial reports, the old standards govern, and users should be aware that the audit opinion they read was produced under a potentially different set of requirements.

Professional indemnity insurers for auditors will need to assess coverage and risk in light of the applicable standard. Claims arising from audits of periods governed by repealed standards will be assessed against those standards. Insurers should ensure their underwriting guidelines reflect the transition dates.

This instrument does not itself create any new duties or rights. Its legal effect is to remove certain instruments from the current law, while preserving their historical operation. The key duties and rights that exist under the broader legislative framework are therefore unaffected in substance, but the instrument clarifies which standard applies to which period.

Duty to conduct audit in accordance with auditing standards: Section 307A of the Corporations Act 2001 imposes an obligation on an auditor to conduct the audit in accordance with the auditing standards as in force at the time the audit is performed. The repeal of a superseded standard does not alter this duty for current audits because the applicable standard is now the Column 2 instrument. However, subsection 4(2) creates a carve-out: the duty for audits of periods ending before the Column 2 instrument applied is to comply with the Column 1 instrument. The auditor must therefore identify the correct standard based on the period under audit, not based on the date of the audit report.

Right to rely on a standard as a complete statement of requirements: An auditor who complies with the applicable auditing standard as identified in the Schedule (either Column 1 for historical periods or Column 2 for subsequent periods) is deemed to have satisfied the Corporations Act audit requirement in respect of that standard. The repeal does not change the effect of compliance. For prospective audits, the auditor has a right to assume that the current standard is the Column 2 instrument, and that the Column 1 instrument is no longer obligatory.

Right of the AUASB to make future amendments: The instrument is made under sections 227B and 336, which confer ongoing powers to vary or repeal standards. The instrument itself is an exercise of that power and does not constrain future exercise. The AUASB retains the right to supersede the Column 2 standards in due course.

No new rights for audited entities: A company subject to audit does not gain any new right to choose which standard applies. The instrument is mandatory and the applicable standard is determined objectively by the transition date. A company cannot insist that its auditor apply an older standard to a current audit simply because that standard is less onerous.

Duty for anyone relying on repealed instruments: The savings provision implies that the repealed instruments retain legal force for their respective periods. Any person who relies on the repealed instrument for a purpose related to that period (for example, an expert witness opining on audit quality) must treat it as still in effect. Repeal does not permit the instrument to be ignored in those circumstances.

The instrument itself contains no penalty provisions. Penalties for non-compliance with auditing standards arise from the Corporations Act 2001 and the ASIC Act 2001, not from the instrument. The key enforcement consequences are as follows.

Civil penalty provisions: Section 307A of the Corporations Act 2001 requires audits to be conducted in accordance with auditing standards. A failure to comply is a strict liability offence under section 1311 of the Corporations Act 2001 read with item 2 of Schedule 3, which carries a penalty of 30 penalty units for an individual (currently approximately AUD 9,900, depending on the current penalty unit value). Additionally, ASIC may seek a civil penalty order for a breach of s 307A, which can lead to a penalty of up to AUD 1.1 million for an individual or AUD 11 million for a body corporate under s 1317G. The applicable auditing standard for the period determines the content of the duty. By clarifying which standard is current, the instrument directly affects the scope of the duty and therefore the potential for penalty.

Enforceable undertakings and banning orders: ASIC may accept an enforceable undertaking from an auditor who has breached the standards, or apply for a banning order under Part 9.4 of the Corporations Act. The instrument’s operation informs ASIC’s assessment of whether the auditor used the correct standard. If an auditor applied a superseded standard to a current period, they may have breached the law. Conversely, if an auditor applied a new standard to a historical period, that may also constitute a breach, although it would arguably be a less serious departure if the new standard is more rigorous.

Professional discipline: Members of professional accounting bodies (e.g., CAANZ, CPA Australia, IPA) are subject to disciplinary codes that reference compliance with auditing standards. The instrument would be used by those bodies to determine the applicable standard for the period under review. A breach of the Corporations Act obligation is likely also a breach of professional standards.

No direct enforcement under the instrument: Since the instrument does not contain penalty provisions, enforcement must always be linked to the underlying Act. However, courts and ASIC may refer to the instrument to determine which standard applied at the relevant time. The savings provision could be critical in defending an allegation: if the audit was conducted under Column 1 during its operative period, the auditor has complied with the law. The instrument therefore has a defensive function as much as an obligatory one.

Documentation risk: Auditors must document which standard they applied and confirm it is the correct one for the period. Failure to maintain adequate audit documentation under ASA 230 (the current version) could itself be a compliance issue. The instrument highlights the need for rigorous dating of audit files and understanding of transition dates.

Corporations Act 2001: This is the primary law. The instrument is made under s 336, which empowers the AUASB to make auditing standards for the purposes of the Corporations Act. Section 307A requires audits to comply with those standards. The instrument modifies the set of standards that are "in force" for future periods. For historical periods, the savings provision ensures that the superseded standard continues to be an "auditing standard" under s 9 of the Corporations Act for that period. The interaction is seamless: the instrument defines the applicable standard by reference to the period.

Australian Securities and Investments Commission Act 2001: Section 227B of that Act provides parallel power for the AUASB to make standards for purposes outside the Corporations Act, such as audits of other entities. The instrument's dual authority means it applies to all audits governed by either Act. The savings provision operates consistently across both regimes.

Legislation Act 2003: As a legislative instrument, the repeal is subject to registration, tabling, and disallowance. It must be published on the Federal Register of Legislation. The instrument's commencement (the day after registration) complies with s 12 of the Legislation Act 2003. The repeal of superseded instruments under s 4(1) is effective from that commencement date. The savings provision under s 4(2) is a standard transitional provision consistent with s 7 of the Acts Interpretation Act 1901, which provides that repeal does not affect rights or liabilities accrued before repeal.

Professional codes of conduct: The instrument interacts indirectly with the ethical requirements for auditors. Auditing Standard ASA 102, which is listed in the Schedule, deals with compliance with ethical requirements. The repeal of older versions of ASA 102 means that auditors must now apply the current version (Column 2, which is further replaced by subsequent versions as indicated by the table). The ethical framework under APES 110 (Code of Ethics for Professional Accountants) is not directly amended by this instrument, but the instrument ensures that the auditing standard that cross-references the Code is up to date.

Australian Auditing Standards suite: The instrument is part of a continuous cycle of standards development. Each superseded standard in Column 1 corresponds to a new standard in Column 2. However, the instrument does not affect standards that have no replacement listed. For example, ASA 800 has multiple replacements listed in different rows; the instrument ensures that only the most recent replacement (Column 2 of the final row for that standard) is current. Practitioners must read the table carefully to see the full chain.

International standards on auditing (ISA): Australian auditing standards are based on the ISAs issued by the IAASB. The instrument reflects the Australian adoption of successive versions of ISAs. The interaction with international standards is indirect, but the instrument ensures that Australian law matches the latest local adoption.

The instrument itself is an amending instrument. Its amendment history is therefore limited to its own creation and any subsequent amendments that may have been made to it. The source text provided does not show any amendments; it appears as made on 11 November 2020. However, the instrument operates by repealing a series of earlier instruments that themselves have amendment histories.

Instruments repealed: The Schedule lists 48 items, each representing a past instrument that was made and registered at a specific date. For instance, ASA 100 - Preamble to AUASB Standards - April 2006 (F2006L01321) was an earlier version that was replaced by ASA 101 - Preamble to Australian Auditing Standards - October 2009 (F2009L04062). The repeal of that 2006 instrument removes a document that had already been superseded for over a decade. The instrument therefore consolidates numerous prior revocations into a single legislative step.

Corresponding Column 2 instruments: Many of these Column 2 instruments have themselves been subsequently superseded by later versions that are not listed in the Schedule. For example, ASA 102 (October 2009) in Column 2 was itself replaced by the March 2018 version shown in Item 2 of Column 1. The instrument does not purport to repeal the third generation of standards; it only repeals the ones that are already superseded by the Column 2 instruments. This means that the instrument does not bring the law fully up to date with the latest versions (for instance, ASA 102 was further replaced in December 2019 as shown in Item 3). The instrument only deals with instruments that were superseded by the Column 2 instruments. It is a partial cleanup, not a complete consolidation.

No amendment to the instrument itself: The instrument has no internal amendment history in the source text. It is a standalone repeal. Future instruments may repeal this instrument if the AUASB decides to further streamline. The instrument's commencement date (day after registration) is its only temporal marker.

Potential gaps: The instrument does not address standards that may have been superseded before 2006, nor does it address any standards that were never formally made as legislative instruments (e.g., pre-2006 standards). The instrument operates within the framework of registered legislative instruments from 2006 onwards.

There is no reference to any litigation in the source text. The instrument has not been the subject of court proceedings, as it is a straightforward administrative measure. However, the broader context of auditing standards has generated litigation in Australia. Cases such as ASIC v Healey (the Centro case) and ASIC v Hellicar have established principles about director and auditor duties, though they did not turn on the specific standards repealed here. The instrument could potentially be cited in litigation if there is a dispute about which standard applied to an audit conducted during a transition period.

Potential future disputes: The savings provision in s 4(2) may become relevant in claims of audit negligence for audits conducted in the period shortly after a standard replaced an earlier one. If a plaintiff argues that an auditor should have applied the new standard before its effective date, the instrument provides a clear statutory rule that the repealed standard continues to apply for periods ending before the new standard applied. This is likely to be a complete defence, absent any implied duty to apply best practice beyond the legal standard.

Administrative law challenges: As a legislative instrument, the repeal could theoretically be challenged on the grounds that it is beyond power, but no such challenge has been recorded. The AUASB has clear authority under ss 227B and 336. The instrument was tabled in Parliament and has not been disallowed.

Professional disciplinary cases: The instrument has not been directly litigated, but it may have been used as an exhibit or reference in professional discipline hearings for auditors who applied the wrong standard. There is no publicly known disciplinary decision that specifically discusses this instrument.

The instrument's litigation history is therefore negligible. It is not a controversial measure. Its primary legal significance is its use as a reference point in any dispute over the applicable standard for a given period.

Savings provision trap: The most easily overlooked aspect is subsection 4(2). Practitioners may assume that once an instrument is repealed, it is gone for all purposes. This is not the case. The old standard still applies to any audit of a period ending before the new standard took effect. An auditor who adopts the new standard for an earlier period may find themselves technically non-compliant if the two standards differ. For example, ASA 540 was significantly revised in the 2019 version. An audit of a 2018 year-end performed in 2020 would still require compliance with the 2009 version of ASA 540, not the 2019 version. The audit methodology must be tailored accordingly.

Transition dates are not stated in the instrument: The instrument does not list the specific date on which each Column 2 instrument started to apply. It refers to "the period in relation to which the corresponding instrument in Column 2 started to apply under subsection 336(3)". The practitioner must look up each Column 2 instrument to find its application date. This adds a layer of research. Missing this step could lead to using the wrong standard.

Incomplete cleanup: The Schedule does not repeal all superseded standards. It only repeals instruments that have a direct replacement listed in Column 2. Some standards may have been superseded by later versions not included in this instrument, meaning those superseded versions remain on the books for now. For example, ASA 260 (December 2015) appears as a Column 2 instrument for Item 12, but that 2015 version may itself have been superseded. The instrument does not address that. Practitioners must still check for subsequent amendments.

Backwards compatibility of Column 2 instruments: Some Column 2 instruments may have been made after the date of this repeal instrument itself (e.g., ASRE 2410 July 2020 appears as Column 2 in Item 48). The instrument was made in November 2020, so that is current. But for earlier Column 2 instruments, the practitioner must verify that no further replacement exists.

Potential confusion with numbering: The Schedule contains multiple entries for the same standard number, such as ASA 540 (Items 25 and 26) and ASA 250 (Items 9 and 10). A practitioner reading an audit file might assume the first Column 1 listing for a standard is the only one to consider, when in fact the chain is sequential. The correct approach is to take the last Column 2 entry for that standard number as the current one, and the first Column 1 entry as the oldest.

Is the instrument itself current?: The instrument has not been updated in the source, but it may have been subsequently amended or itself superseded. Practitioners must confirm on the Federal Register of Legislation that this instrument is still operative. The instrument's own status as a legislative instrument could change.

No list of effective dates: The instrument does not include a consolidated table of all effective dates for each standard. Anyone reconstructing the history of standards for a particular period must cross-reference multiple instruments. This increases compliance costs for forensic accounting work.

Compliance with this instrument requires no positive action beyond ensuring that the correct auditing standard is applied for the correct period. The following steps are recommended.

Identify the applicable standard for each audit engagement: For a new audit, determine the period under audit. If the period ends after the application date of the Column 2 instrument in Schedule 1, then that Column 2 instrument is the operative standard. If the period ends before that application date, then the Column 1 (repealed) instrument remains the applicable standard. This determination must be made for each standard individually, as different standards have different transition dates.

Access the correct version: For current standards, obtain the most recent version from the AUASB website. For repealed standards that still apply to historical audits, the practitioner can download the archived version from the Federal Register of Legislation using the FRL identifier in Column 1. These versions remain legally effective for their respective periods despite the repeal.

Update audit methodology manuals: Audit firms should review their internal methodology manuals and workpaper templates to ensure they reference the current standard for any new engagement. References to superseded standards (Column 1) should be updated to Column 2. However, firms that serve clients with December year-ends may still need to apply the old standards for periods ending before the transition date, so the old methodology should be retained in a separate archive.

Training and awareness: Audit staff should be trained on the existence of this instrument and its savings provision. They should understand that the repeal does not mean the old standard is irrelevant; it means the opposite for historical periods. Assigning the wrong standard to an audit could constitute a breach of s 307A of the Corporations Act 2001.

Documentation: The audit file should document which version of each standard was applied and confirm that it is the correct version for the period under audit. This is especially important for audits that straddle a transition date (e.g., a group audit with subsidiaries having different year-ends). The instrument provides a clear legal hook for that documentation.

Continuous monitoring: The AUASB may issue further repeal instruments. Practitioners should monitor the Federal Register of Legislation for any subsequent instrument that updates the Schedule. The current instrument may itself be superseded. Compliance is an ongoing process.

For historical investigations: If responding to an ASIC inquiry or a professional negligence claim regarding an audit conducted years ago, identify the relevant period and consult the repealed instrument as it existed at that time. The instrument provides the legal basis to assert that the superseded standard is the correct benchmark.