Amendments to ASA 230Amendments to ASA 230

Amendments to ASA 230

1. Existing paragraph A7 is amended to read as follows:

Audit documentation provides evidence that the audit complies with the Australian Auditing Standards. However, it is neither necessary nor practicable for the auditor to document every matter considered, or professional judgement made, in an audit. Further, it is unnecessary for the auditor to document separately (as in a checklist, for example) compliance with matters for which compliance is demonstrated by documents included within the audit file. For example:

 The existence of an adequately documented audit plan demonstrates that the auditor has planned the audit.

 The existence of a signed engagement letter in the audit file demonstrates that the auditor has agreed the terms of the audit engagement with management or, where appropriate, those charged with governance.

 An auditor’s report containing an appropriately qualified opinion on the financial report demonstrates that the auditor has complied with the requirement to express a qualified opinion under the circumstances specified in the Australian Auditing Standards.

 In relation to requirements that apply generally throughout the audit, there may be a number of ways in which compliance with them may be demonstrated within the audit file:

o For example, there may be no single way in which the auditor’s professional scepticism is documented. But the audit documentation may nevertheless provide evidence of the auditor’s exercise of professional scepticism in accordance with the Australian Auditing Standards. For example, in relation to accounting estimates, when the audit evidence obtained includes evidence that both corroborates and contradicts management’s assertions, documenting how the auditor evaluated that evidence, including the professional judgements made in forming a conclusion as to the sufficiency and appropriateness of the audit evidence obtained. Such evidence may include specific procedures performed to corroborate management’s responses to the auditor’s enquiries.

o Similarly, that the engagement partner has taken responsibility for the direction, supervision and performance of the audit in compliance with the Australian Auditing Standards may be evidenced in a number of ways within the audit documentation. This may include documentation of the engagement partner’s timely involvement in aspects of the audit, such as participation in the team discussions required by ASA 315.5

1. Existing paragraph A10 of this Auditing Standard is amended to read as follows:

Some examples of circumstances in which, in accordance with paragraph 8, it is appropriate to prepare audit documentation relating to the use of professional judgement include, where the matters and judgements are significant: