Auditing Standard ASA 2020-1 Amendments to Australian Auditing Standards
Amendments to ASA 500Amendments to ASA 500
Start here
Get a plain-English read of Amendments to ASA 500
Turn the raw legal text into a practical explanation grounded in Auditing Standard ASA 2020-1 Amendments to Australian Auditing Standards.
Amendments to ASA 500
- Existing paragraph A5 is amended to read as follows:
Audit evidence is necessary to support the auditor’s opinion and report. It is cumulative in nature and is primarily obtained from audit procedures performed during the course of the audit. It may, however, also include information obtained from other sources such as previous audits (provided the auditor has evaluated whether such information remains relevant and reliable as audit evidence for the current audit determined whether changes have occurred since the previous audit that may affect its relevance to the current audit) or a firm’s quality control procedures for client acceptance and continuance. In addition to other sources inside and outside the entity, the entity’s accounting records are an important source of audit evidence. Also, information that may be used as audit evidence may have been prepared using the work of a management’s expert. Audit evidence comprises both information that supports and corroborates management’s assertions, and any information that contradicts such assertions. In addition, in some cases the absence of information (for example, management’s refusal to provide a requested representation) is used by the auditor, and therefore, also constitutes audit evidence.
- Existing footnote 9 in paragraph A5 is amended to read as follows:
See ASA 315, paragraph 916.
- Existing paragraph A21 is amended to read as follows:
Observation consists of looking at a process or procedure being performed by others, for example, the auditor’s observation of inventory counting by the entity’s personnel, or of the performance of controls activities. Observation provides audit evidence about the performance of a process or procedure, but is limited to the point in time at which the observation takes place, and by the fact that the act of being observed may affect how the process or procedure is performed. See ASA 501 for further guidance on observation of the counting of inventory.