Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards
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Commonwealth
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legislative instrument
Plain English Summary
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ASA 2021-3 makes technical, consequential amendments to ASA 200 and ASA 700 to align those standards with the revised ASA 101. It clarifies effective dates and adds a requirement that auditors who choose to early‑adopt a standard made under section 336 of the Corporations Act must record that election in the auditor’s report and adopt related conforming and consequential amendments. It applies to auditors of statutory and other financial reports; auditors (and indirectly their clients) will bear the compliance and reporting burden and decide whether to early‑adopt.
This instrument, Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards (ASA 2021-3), makes targeted, consequential and conforming amendments to existing Australian Auditing Standards, principally ASA 200 and ASA 700. Mechanically, it (a) inserts and amends text to clarify when and how auditors may early adopt AUASB-made standards, (b) amends ASA 200 paragraph A56 to restate the default prohibition on applying an Auditing Standard before its effective date unless the standard says otherwise (para. 8), and (c) amends ASA 700 by inserting a new requirement that an auditor who elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001 must record that election in the auditor’s report (new Aus 42.1; paras. 9-14). ASA 700 also receives explanatory material additions that (i) require the auditor to identify relevant Australian ethical requirements when providing the basis for opinion (Aus 28.1(c) as noted in para. 9), (ii) require the auditor to reference the Auditing and Assurance Standards Board (AUASB) and its website address when referring to a description of the auditor’s responsibilities on a website (Aus A57.1, as noted in para. 10), and (iii) add guidance on reporting an election to early adopt , including that the election may be recorded as an Other Matter paragraph and that ASA 706 is relevant for that reporting approach (Aus A57.2; paras. 10 and 14). The Standard is operative for financial reporting periods commencing on or after 1 October 2021 (para. 3).
The AUASB frames these changes as consequential and conforming amendments arising from the revised ASA 101 Preamble to AUASB Standards (September 2021). The Preface and Reasons for Issuing describe the AUASB’s statutory basis and mandate , the AUASB is established under section 227A of the Australian Securities and Investments Commission Act 2001, may make Auditing Standards under section 336 of the Corporations Act 2001, and Auditing Standards are legislative instruments under the Legislation Act 2003 (Preface; Authority Statement). The stated policy purpose is to maintain quality and resolve editorial conflicts between standards following the ASA 101 Preamble revision (Preface, Reasons for Issuing, Main Features).
Current sections
Direct links to the current provisions in Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards.
20
Obtaining a Copy of this Auditing Standa
Obtaining a Copy of this Auditing Standard
Obtaining a Copy of this Auditing Standard
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
Contact Details
Contact Details
Contact Details
Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA
Phone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA
Requests and enquiries concerning reproduction and rights for commercial purposes should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
ISSN 1833-4393
CONTENTS
CONTENTS
CONTENTS
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Requests and enquiries concerning reproduction and rights for commercial purposes should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
ISSN 1833-4393
CONTENTS
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Amendments to Auditing Standards..............................................7
Amendments to ASA 200.......................................................8
Amendments to ASA 700.......................................................9-15
preface
Reasons for Issuing ASA 2021-3
The Australian Auditing and Assurance Board (AUASB) issues Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is a non-corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
Main Features
This Auditing Standard makes amendments to the requirements and application and other explanatory material of the following Auditing Standards:
ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (issued October 2009 and amended to June 2020)
ASA 700 Forming an Opinion and Reporting on a Financial Report (issued December 2015 and amended to June 2020)
These amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards in September 2021. Under its mandate, the AUASB is required to maintain the quality and relevance of the Auditing Standards. Accordingly, amendments to existing Auditing Standards are made whenever necessary to correct editorial issues or to resolve conflicts between standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
Dated: 7 September 2021 W R Edge
Chair - AUASB
Conformity with International Standards on Auditing
This Auditing Standard has been made for Australian legislative purposes and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Reasons for Issuing ASA 2021-3
Reasons for Issuing ASA 2021-3
Reasons for Issuing ASA 2021-3
The Australian Auditing and Assurance Board (AUASB) issues Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is a non-corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
Main Features
Main Features
Main Features
This Auditing Standard makes amendments to the requirements and application and other explanatory material of the following Auditing Standards:
ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (issued October 2009 and amended to June 2020)
ASA 700 Forming an Opinion and Reporting on a Financial Report (issued December 2015 and amended to June 2020)
These amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards in September 2021. Under its mandate, the AUASB is required to maintain the quality and relevance of the Auditing Standards. Accordingly, amendments to existing Auditing Standards are made whenever necessary to correct editorial issues or to resolve conflicts between standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
Dated: 7 September 2021 W R Edge
Chair - AUASB
Conformity with International Standards on Auditing
This Auditing Standard has been made for Australian legislative purposes and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
AUTHORITY STATEMENT
AUTHORITY STATEMENT
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
Conformity with International Standards
Conformity with International Standards on Auditing
Conformity with International Standards on Auditing
This Auditing Standard has been made for Australian legislative purposes and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Auditing Standard ASA 2021-3
Auditing Standard ASA 2021-3
Auditing Standard ASA 2021-3
Amendments to Australian Auditing Standards
Application
This Auditing Standard applies to:
an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and
an audit of a financial report, or a complete set of financial statements, for any other purpose.
This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.
Operative Date
This Auditing Standard is operative for financial reporting periods commencing on or after 1 October 2021.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards (September 2021).
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
(a) ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (Issued October 2009 and amended to June 2020)
(b) ASA 700 Forming an Opinion and Reporting on a Financial Report (Issued December 2015 and amended to June 2020)
Definition
For the purposes of this Auditing Standard, the meanings of terms are set out in each Auditing Standard and in the AUASB Glossary. This Auditing Standard does not introduce new definitions.
Amendments to Auditing Standards
This Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Amended paragraphs are shown with deleted text struck through and new text underlined. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Amendments to ASA 200
Existing paragraph A56 is amended to read as follows:
The scope, effective date and any specific limitation of the applicability of a specific Auditing Standard is made clear in the Auditing Standard. Unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified therein.
Amendments to ASA 700
The existing third paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following requirements are additional to ISA 700:
Paragraph Aus 28.1(c) requires the auditor to identify the relevant ethical requirements applicable within Australia when providing the basis for opinion.
Aus 42.1 requires that when the auditor elects to early adopt an Auditing Standard made under 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
…
The existing fourth paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following application and other explanatory material is additional to ISA 700:
Paragraph Aus A57.1 identifies the Auditing and Assurance Standards Board and its website address when an auditor refers to a description of the auditor’s responsibilities on a website.
Paragraph Aus A57.2 includes guidance on how the election to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001 could be reported in the auditor’s report and includes a reference to ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report for further requirements and guidance relevant to Other Matter paragraphs.
…
Following existing paragraph 42, and before the sub-heading “Other Reporting Responsibilities”, the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus 42.1 is inserted:
When the auditor elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
Following existing paragraph Aus A57.1, and before the sub-heading “Other Reporting Responsibilities (Ref: Para. 43-45)” the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus A57.2 is inserted:
Unless otherwise stated in an Auditing Standard, the auditor is permitted to apply the standard before the operative date specified therein. Where an Auditing Standard is early adopted, all relevant conforming and consequential amendments must also be early adopted.# Where the auditor elects to early adopt an Auditing Standard, the election may be recorded in the auditor’s report as an Other Matter paragraph. Refer to ASA 706 for requirements and guidance relevant to Other Matter paragraphs.
A new footnote, referenced to paragraph Aus A57.2 of this Auditing Standard, is inserted to read as follows:
See ASA 200, paragraph A56 and ASA 101 Preamble to AUASB Standards, paragraphs A33-A35.
Amendments to Australian Auditing Standa
Amendments to Australian Auditing Standards
Auditing Standard ASA 2021-3
Amendments to Australian Auditing Standards
Application
This Auditing Standard applies to:
an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and
an audit of a financial report, or a complete set of financial statements, for any other purpose.
This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.
Operative Date
This Auditing Standard is operative for financial reporting periods commencing on or after 1 October 2021.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards (September 2021).
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
(a) ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (Issued October 2009 and amended to June 2020)
(b) ASA 700 Forming an Opinion and Reporting on a Financial Report (Issued December 2015 and amended to June 2020)
Definition
For the purposes of this Auditing Standard, the meanings of terms are set out in each Auditing Standard and in the AUASB Glossary. This Auditing Standard does not introduce new definitions.
Amendments to Auditing Standards
This Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Amended paragraphs are shown with deleted text struck through and new text underlined. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Amendments to ASA 200
Existing paragraph A56 is amended to read as follows:
The scope, effective date and any specific limitation of the applicability of a specific Auditing Standard is made clear in the Auditing Standard. Unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified therein.
Amendments to ASA 700
The existing third paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following requirements are additional to ISA 700:
Paragraph Aus 28.1(c) requires the auditor to identify the relevant ethical requirements applicable within Australia when providing the basis for opinion.
Aus 42.1 requires that when the auditor elects to early adopt an Auditing Standard made under 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
…
The existing fourth paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following application and other explanatory material is additional to ISA 700:
Paragraph Aus A57.1 identifies the Auditing and Assurance Standards Board and its website address when an auditor refers to a description of the auditor’s responsibilities on a website.
Paragraph Aus A57.2 includes guidance on how the election to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001 could be reported in the auditor’s report and includes a reference to ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report for further requirements and guidance relevant to Other Matter paragraphs.
…
Following existing paragraph 42, and before the sub-heading “Other Reporting Responsibilities”, the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus 42.1 is inserted:
When the auditor elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
Following existing paragraph Aus A57.1, and before the sub-heading “Other Reporting Responsibilities (Ref: Para. 43-45)” the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus A57.2 is inserted:
Unless otherwise stated in an Auditing Standard, the auditor is permitted to apply the standard before the operative date specified therein. Where an Auditing Standard is early adopted, all relevant conforming and consequential amendments must also be early adopted.# Where the auditor elects to early adopt an Auditing Standard, the election may be recorded in the auditor’s report as an Other Matter paragraph. Refer to ASA 706 for requirements and guidance relevant to Other Matter paragraphs.
A new footnote, referenced to paragraph Aus A57.2 of this Auditing Standard, is inserted to read as follows:
See ASA 200, paragraph A56 and ASA 101 Preamble to AUASB Standards, paragraphs A33-A35.
Application
Application
Application
This Auditing Standard applies to:
an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and
an audit of a financial report, or a complete set of financial statements, for any other purpose.
This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.
Operative Date
Operative Date
Operative Date
This Auditing Standard is operative for financial reporting periods commencing on or after 1 October 2021.
Introduction
Introduction
Auditing Standard ASA 2021-3
Amendments to Australian Auditing Standards
Application
This Auditing Standard applies to:
an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and
an audit of a financial report, or a complete set of financial statements, for any other purpose.
This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.
Operative Date
This Auditing Standard is operative for financial reporting periods commencing on or after 1 October 2021.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards (September 2021).
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
(a) ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (Issued October 2009 and amended to June 2020)
(b) ASA 700 Forming an Opinion and Reporting on a Financial Report (Issued December 2015 and amended to June 2020)
Definition
For the purposes of this Auditing Standard, the meanings of terms are set out in each Auditing Standard and in the AUASB Glossary. This Auditing Standard does not introduce new definitions.
Amendments to Auditing Standards
This Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Amended paragraphs are shown with deleted text struck through and new text underlined. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Amendments to ASA 200
Existing paragraph A56 is amended to read as follows:
The scope, effective date and any specific limitation of the applicability of a specific Auditing Standard is made clear in the Auditing Standard. Unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified therein.
Amendments to ASA 700
The existing third paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following requirements are additional to ISA 700:
Paragraph Aus 28.1(c) requires the auditor to identify the relevant ethical requirements applicable within Australia when providing the basis for opinion.
Aus 42.1 requires that when the auditor elects to early adopt an Auditing Standard made under 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
…
The existing fourth paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following application and other explanatory material is additional to ISA 700:
Paragraph Aus A57.1 identifies the Auditing and Assurance Standards Board and its website address when an auditor refers to a description of the auditor’s responsibilities on a website.
Paragraph Aus A57.2 includes guidance on how the election to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001 could be reported in the auditor’s report and includes a reference to ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report for further requirements and guidance relevant to Other Matter paragraphs.
…
Following existing paragraph 42, and before the sub-heading “Other Reporting Responsibilities”, the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus 42.1 is inserted:
When the auditor elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
Following existing paragraph Aus A57.1, and before the sub-heading “Other Reporting Responsibilities (Ref: Para. 43-45)” the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus A57.2 is inserted:
Unless otherwise stated in an Auditing Standard, the auditor is permitted to apply the standard before the operative date specified therein. Where an Auditing Standard is early adopted, all relevant conforming and consequential amendments must also be early adopted.# Where the auditor elects to early adopt an Auditing Standard, the election may be recorded in the auditor’s report as an Other Matter paragraph. Refer to ASA 706 for requirements and guidance relevant to Other Matter paragraphs.
A new footnote, referenced to paragraph Aus A57.2 of this Auditing Standard, is inserted to read as follows:
See ASA 200, paragraph A56 and ASA 101 Preamble to AUASB Standards, paragraphs A33-A35.
Scope of this Auditing Standard
Scope of this Auditing Standard
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards (September 2021).
Objective
Objective
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
(a) ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (Issued October 2009 and amended to June 2020)
(b) ASA 700 Forming an Opinion and Reporting on a Financial Report (Issued December 2015 and amended to June 2020)
Definition
Definition
Definition
For the purposes of this Auditing Standard, the meanings of terms are set out in each Auditing Standard and in the AUASB Glossary. This Auditing Standard does not introduce new definitions.
Amendments to Auditing Standards
Amendments to Auditing Standards
Amendments to Auditing Standards
This Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Amended paragraphs are shown with deleted text struck through and new text underlined. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Amendments to ASA 200
Amendments to ASA 200
Amendments to ASA 200
Existing paragraph A56 is amended to read as follows:
The scope, effective date and any specific limitation of the applicability of a specific Auditing Standard is made clear in the Auditing Standard. Unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified therein.
Amendments to ASA 700
Amendments to ASA 700
Amendments to ASA 700
The existing third paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following requirements are additional to ISA 700:
Paragraph Aus 28.1(c) requires the auditor to identify the relevant ethical requirements applicable within Australia when providing the basis for opinion.
Aus 42.1 requires that when the auditor elects to early adopt an Auditing Standard made under 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
…
The existing fourth paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following application and other explanatory material is additional to ISA 700:
Paragraph Aus A57.1 identifies the Auditing and Assurance Standards Board and its website address when an auditor refers to a description of the auditor’s responsibilities on a website.
Paragraph Aus A57.2 includes guidance on how the election to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001 could be reported in the auditor’s report and includes a reference to ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report for further requirements and guidance relevant to Other Matter paragraphs.
…
Following existing paragraph 42, and before the sub-heading “Other Reporting Responsibilities”, the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus 42.1 is inserted:
When the auditor elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
Following existing paragraph Aus A57.1, and before the sub-heading “Other Reporting Responsibilities (Ref: Para. 43-45)” the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus A57.2 is inserted:
Unless otherwise stated in an Auditing Standard, the auditor is permitted to apply the standard before the operative date specified therein. Where an Auditing Standard is early adopted, all relevant conforming and consequential amendments must also be early adopted.# Where the auditor elects to early adopt an Auditing Standard, the election may be recorded in the auditor’s report as an Other Matter paragraph. Refer to ASA 706 for requirements and guidance relevant to Other Matter paragraphs.
A new footnote, referenced to paragraph Aus A57.2 of this Auditing Standard, is inserted to read as follows:
See ASA 200, paragraph A56 and ASA 101 Preamble to AUASB Standards, paragraphs A33-A35.
Source text: opening excerpt
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Obtaining a Copy of this Auditing Standa Obtaining a Copy of this Auditing Standard
Obtaining a Copy of this Auditing Standard
This Auditing Standard is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au
Contact Details Contact Details
Contact Details
Auditing and Assurance Standards BoardPodium Level 14, 530 Collins StreetMelbourne Victoria 3000AUSTRALIA
Phone: (03) 8080 7400E-mail: enquiries@auasb.gov.auPostal Address:PO Box 204, Collins Street WestMelbourne Victoria 8007AUSTRALIA
Requests and enquiries concerning reproduction and rights for commercial purposes should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
ISSN 1833-4393
CONTENTS CONTENTS
CONTENTS
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Amendments to Auditing Standards..............................................7
Amendments to ASA 200.......................................................8
In short, ASA 2021-3 does not create new auditing subject-matter or new definitions. It (1) formalises an auditor reporting requirement where an auditor chooses to early adopt an AUASB standard made under s. 336(4) of the Corporations Act, (2) clarifies that early adoption is permitted unless an Auditing Standard states otherwise, and (3) requires auditors to adopt any relevant conforming or consequential amendments when they early adopt a standard (paras. 7, 12-14). The instrument is dated 7 September 2021 and signed by the AUASB Chair (Authority Statement).
Main concepts
ASA 2021-3 is narrowly focused on the mechanics of standard adoption and auditor reporting when a standard is adopted early. The principal concepts introduced or clarified by the instrument are:
Early adoption and recording the election: The Standard requires that, where an auditor elects to early adopt an Auditing Standard made under s. 336 of the Corporations Act 2001, that election must be recorded in the auditor’s report (new Aus 42.1; para. 12). The Standard also explains that the election may be recorded as an Other Matter paragraph and that ASA 706 supplies the requirements and guidance for that approach (Aus A57.2; para. 14).
Default effective‑date rule reaffirmed: ASA 200 paragraph A56 is amended to state explicitly that, unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified in that standard (para. 8). This restates the usual rule and makes it explicit as an amended paragraph of ASA 200.
Requirement to adopt conforming and consequential amendments when early adopting: Aus A57.2 requires that where an Auditing Standard is early adopted, all relevant conforming and consequential amendments must also be early adopted (para. 14). The explanatory footnote points the reader to ASA 200 paragraph A56 and ASA 101 Preamble paragraphs A33-A35 for context (para. 15).
Local ethical‑requirements disclosure: ASA 700 is amended such that the list of requirements additional to ISA 700 includes a note that Aus 28.1(c) requires the auditor to identify the relevant ethical requirements applicable within Australia when providing the basis for opinion (para. 9). This links the auditor’s report content to domestic ethical frameworks.
Website reference guidance: ASA 700’s application material is expanded to include Aus A57.1, which identifies the AUASB and its website address when an auditor refers audit responsibility descriptions on a website (para. 10). This establishes a precise referent for auditors who choose to link to external descriptions of responsibilities.
No new definitions: The Standard specifies it does not introduce new definitions and that definitions remain in each Auditing Standard and the AUASB Glossary (para. 6).
Structurally, the instrument uses underlining, striking out and typographical marks in the drafting to show amendments, but it clarifies these editorial devices are not part of the amendments themselves (para. 7). The Standard is explicitly consequential to the revised ASA 101 Preamble (paras. 4 and Main Features). The Standard applies to audits conducted under the Corporations Act and to audits of financial reports or complete sets of financial statements for other purposes, and to audits of historical financial information as appropriate (Application paras. 1-2).
The AUASB stresses the legislative and governance context: its powers flow from the ASIC Act and Corporations Act and it operates under the Strategic Direction of the Financial Reporting Council to develop standards with a public interest focus (Preface, Reasons for Issuing). The Standard is a legislative instrument under the Legislation Act 2003 (Preface).
Who it affects
The primary regulated group is practising auditors and audit firms who issue reports on financial reports subject to the Corporations Act 2001, and those who audit financial reports for other purposes. The Application section makes this explicit: the Standard applies to audits of financial reports for financial years and half‑years under the Corporations Act, and to audits of financial reports or complete sets of financial statements for any other purpose (Application paras. 1-2). It also applies, as appropriate, to audits of other historical financial information (para. 2).
Secondary stakeholders include:
Audit clients (companies and entities whose financial reports are audited). The Standard affects what is reported in auditor’s reports where their auditors choose to early adopt an AUASB standard; such disclosures may appear in the auditor’s report (new Aus 42.1; paras. 12, 14).
Audit committees and boards. They will need to understand the implications of an auditor’s election to early adopt a standard because it must be recorded in the auditor’s report and may be brought before governance bodies, particularly where the auditor’s report includes an Other Matter paragraph.
Regulators: The AUASB, the Financial Reporting Council (FRC) and the Australian Securities and Investments Commission (ASIC) are implicated institutionally. The AUASB is the maker of the Standard (Authority Statement) and the instrument notes the AUASB’s role under the ASIC Act and the Corporations Act (Preface, Authority Statement). ASIC enforces corporations law more generally; while this Standard does not set out enforcement steps, its status as a legislative instrument (Preface) places it within the legislative framework regulators oversee.
Users of financial reports (investors, lenders, analysts, courts): The Standard influences the content and structure of auditor’s reports in situations of early adoption, which can affect report comparability and the signalling of audit practice changes.
Professional bodies and quality‑assurance reviewers: Firms’ internal quality control and external practice review mechanisms will need to monitor compliance with the new reporting obligations and the requirement to early adopt consequential amendments.
Operational impacts are concentrated on auditors and their firms. They bear the incremental compliance and documentation tasks: deciding whether to early adopt, ensuring all conforming/consequential amendments are also early adopted (Aus A57.2; para. 14), recording the election in the auditor’s report (Aus 42.1; para. 12), and following ASA 706 if using an Other Matter paragraph (para. 14). The Standard also imposes a modest coordination task: when auditing standards are revised and early adoption options exist, engagement teams must track related amendments across ASA 200, ASA 700, ASA 706 and ASA 101 Preamble paragraphs A33-A35, all cited in the instrument (paras. 8, 12-15).
Because the Standard does not itself set substantive auditing techniques or change reporting thresholds, its principal burden is procedural and documentary. The Standard’s legislative character (Preface) means auditors working under corporations law will commonly treat these procedural obligations as part of their compliance universe.
Key duties and rights
The Standard’s operative text creates and clarifies duties for auditors and provides limited rights about early application of standards. The critical duties and procedural rights are:
Duty to record early‑adoption election in the auditor’s report: Where an auditor elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001, that election must be recorded in the auditor’s report (new Aus 42.1; para. 12). The Standard does not prescribe precise wording for that recording, but it requires the act of recording.
Right to early adopt, subject to limitations: The instrument clarifies that, unless otherwise stated in an Auditing Standard, the auditor is permitted to apply the standard before the operative date specified therein (Aus A57.2; para. 14). This establishes a right of early adoption as the default, but subject to any contrary direction in the particular Auditing Standard.
Duty to adopt associated amendments when early adopting: When an Auditing Standard is early adopted, all relevant conforming and consequential amendments must also be early adopted (Aus A57.2; para. 14). This duty limits the practical convenience of partial early adoption and ensures consistency across standards.
Duty not to apply standards before effective date unless permitted: ASA 200, as amended at paragraph A56, states that, unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified therein (para. 8). That restates a default prohibition and confirms that any early adoption requires the standard to allow it explicitly or be subject to the general early‑adoption permission in Aus A57.2.
Duty to identify Australian ethical requirements in the basis for opinion: ASA 700’s amendments include a requirement, captured in the list of requirements additional to ISA 700, that an auditor must identify relevant ethical requirements applicable within Australia when providing the basis for opinion (Aus 28.1(c) as cited in para. 9). That imposes an obligation on the content of the basis for opinion in auditor’s reports for Australian engagements.
Duty to provide correct AUASB reference when referring to a website description: ASA 700’s application material includes Aus A57.1, which identifies the AUASB and its website address when an auditor refers to a description of the auditor’s responsibilities on a website (para. 10). This places a duty on auditors to use the AUASB as the referent for such descriptions.
Duty to follow ASA 706 when using Other Matter paragraphs: The Standard references ASA 706 for requirements and guidance where the auditor records an early‑adoption election as an Other Matter paragraph (Aus A57.2; para. 14). That means an auditor seeking to use this reporting route must comply with ASA 706’s form and content restrictions.
Rights are primarily procedural: auditors have a default right to early adopt standards unless a specific standard says otherwise (Aus A57.2; para. 14). This right is bounded by the duty to adopt all relevant conforming and consequential amendments and to record the election in the auditor’s report when the standard is made under s. 336 (Aus 42.1; para. 12).
The Standard does not create new substantive audit procedures, nor does it change materiality thresholds or the auditor’s core opinion responsibilities. It clarifies reporting and timing duties. It also explicitly states that it introduces no new definitions (para. 6), so existing definitions in each standard and the AUASB Glossary continue to govern rights and duties defined elsewhere.
Finally, the Standard has legislative force as an Auditing Standard made by the AUASB under section 336 of the Corporations Act (Authority Statement) and is a legislative instrument under the Legislation Act 2003 (Preface). Therefore, while the instrument does not itself state enforcement mechanisms or penalties, the duties it imposes exist within the corpus of Australian auditing and corporations law and are intended to be treated as mandatory within that framework.
Penalties and enforcement
The text of ASA 2021-3 does not set out specific penalties, sanctions, or a dedicated enforcement regime. Instead, it situates the Standard within the statutory and regulatory architecture that gives AUASB standards their legal character and context. The relevant statements in the Preface and Authority Statement are:
The AUASB is established under section 227A of the Australian Securities and Investments Commission Act 2001 and may make Auditing Standards under section 336 of the Corporations Act 2001 for the purposes of the corporations legislation (Preface; Authority Statement). The instrument is made pursuant to s. 227B of the ASIC Act and s. 336 of the Corporations Act (Authority Statement).
Auditing Standards made by the AUASB are legislative instruments under the Legislation Act 2003 (Preface). This classification indicates a formal legislative form, as distinct from mere guidance.
The Standard therefore acquires legal significance by virtue of the statute authorising the AUASB and the treatment of its Auditing Standards as legislative instruments. However, ASA 2021-3 itself does not specify which regulator enforces compliance with the Standard, what penalties follow non‑compliance, or administrative processes for breaches. In practice, enforcement of auditing obligations under the Corporations Act typically involves ASIC and may involve professional disciplinary bodies, civil liability in negligence claims, or other statutory remedies; but the Standard does not describe or prescribe these enforcement avenues.
Two points flow from the text that are relevant for practitioners:
The Standard’s mandatory‑style wording and its status as a legislative instrument imply auditors must treat its duties as part of their compliance framework for Corporations Act engagements (Preface, Authority Statement). The auditor’s obligations under the Corporations Act and associated regulations, including adherence to AUASB standards, are embedded in that legal framework.
Where the Standard requires the auditor to record an early‑adoption election in the auditor’s report (new Aus 42.1), failure to include that disclosure could have downstream regulatory or contractual consequences in the event of an inspection, a regulatory query, or litigation. The Standard itself does not quantify those consequences.
Because ASA 2021-3 is procedural and relates to reporting practice, enforcement risk is likely to be concentrated in administrative or professional review contexts: regulatory inspection by ASIC or professional conduct review by bodies responsible for auditor registration and discipline. The instrument’s text points to ASA 706 as governing the form and content when the auditor uses Other Matter paragraphs to record an early‑adoption election (para. 14), so non‑conformity with ASA 706 (as applied) would be a relevant point of review.
In sum, the Standard provides the content of new duties and the authority under which those duties sit, but it leaves enforcement mechanisms to the broader regulatory and legal environment in which AUASB standards operate. The instrument does not itself set out penalties or enforcement procedures.
How it interacts with other laws
ASA 2021-3 situates itself explicitly within Australia's statutory auditing framework and cross‑references a number of AUASB and Corporations Act provisions, creating direct interactions with other standards and statutory provisions:
Corporations Act 2001, section 336: The Standard repeatedly links the early‑adoption recording requirement to Auditing Standards made under s. 336 of the Corporations Act. New Aus 42.1 makes the recording obligation conditional on the standard being made under s. 336 and on the auditor electing to early adopt in accordance with s. 336(4) (para. 12). The Authority Statement confirms the AUASB’s power to make Auditing Standards under s. 336 (Authority Statement). The Standard therefore operates where AUASB standards have statutory footing under corporations law.
Australian Securities and Investments Commission Act 2001, sections 227A and 227B: The Preface identifies the AUASB’s statutory establishment under s. 227A of the ASIC Act and the making of this Auditing Standard pursuant to s. 227B (Preface, Authority Statement). That places ASA 2021-3 within the governance arrangement set out in the ASIC Act.
Legislation Act 2003: The instrument states Auditing Standards are legislative instruments under the Legislation Act 2003 (Preface). That classification affects how the instrument is registered, published and cited as subordinate legislation and frames its legal force.
ASA 101 Preamble to AUASB Standards: ASA 2021-3 is consequential to the revised ASA 101 Preamble (September 2021) and points to ASA 101 Preamble paragraphs A33-A35 in a footnote (para. 15). The Standard directs users to ASA 101 for context on applying and interpreting AUASB standards, particularly around effective dates and early adoption.
ASA 200: ASA 2021-3 amends ASA 200 paragraph A56 to restate the default rule about applying standards before their effective date (para. 8). ASA 200 thus interacts by providing the high‑level rule about effective dates that supports the new early‑adoption provisions in ASA 700.
ASA 700: The Standard directly amends ASA 700 to add the early‑adoption recording obligation, the requirement to identify Australian ethical requirements in the basis for opinion (Aus 28.1(c) referenced in para. 9), and the website‑referent guidance (Aus A57.1; para. 10). ASA 700 is the vehicle by which auditor reporting content is modified.
ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs: ASA 2021-3 directs auditors to ASA 706 when recording an early‑adoption election as an Other Matter paragraph (Aus A57.2; para. 14). This cross‑reference governs the form and content constraints applicable to that reporting option.
AUASB Glossary and AUASB website: The Standard leaves definitions to existing standards and the AUASB Glossary (para. 6). It also requires that, when auditors refer to a description of responsibilities on a website, auditors should identify the AUASB and its website address (Aus A57.1; para. 10), anchoring such references to AUASB materials.
International Standards on Auditing (ISAs): The Standard notes that the amendments are additional to ISA 700 and identifies additional requirements and explanatory material that are specific to Australia (para. 9-10). It also states there is no equivalent ISA for the Standard itself because it was made for Australian legislative purposes (Conformity with ISA).
Practical consequences of these interactions include:
When a new AUASB standard is made under s. 336 and permits early adoption, auditors must check ASA 200’s effective date rule, ASA 101 guidance on early adoption (paras A33-A35 in ASA 101), and adopt all related conforming amendments (para. 14).
Any auditor choosing to early adopt must ensure the auditor’s report contains the required election disclosure (Aus 42.1), that the disclosure is formatted and worded in a way that follows ASA 706 if recorded as an Other Matter paragraph, and that any references to auditor responsibilities on a website correctly identify the AUASB and its website (Aus A57.1).
Because the Standard is a legislative instrument under the Legislation Act, it fits into the regime of subordinate legislation and corporations law obligations; consequences for failure to comply are therefore determined by the wider statutory and regulatory regime.
Overall, ASA 2021-3 operates as a bridge between the AUASB’s technical standard‑setting (ASA 101, ASA 200, ASA 700, ASA 706) and the statutory framework that gives AUASB standards legal salience (s. 336 of the Corporations Act, ASIC Act and Legislation Act 2003).
Amendment history
ASA 2021-3 itself is an amending Auditing Standard issued by the AUASB on 7 September 2021 (Authority Statement). The instrument records the following points of origin and amendment context:
Basis and authorisation: The AUASB makes the Standard pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001 (Authority Statement). The AUASB Chair, W R Edge, dated the instrument 7 September 2021 (Authority Statement).
Operative date: The Standard is operative for financial reporting periods commencing on or after 1 October 2021 (para. 3). That provides a clear temporal pivot for practitioners.
Relationship to other standards: The instrument states that it makes consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards in September 2021 (paras. 4 and Main Features). It identifies the immediate targets of amendment as ASA 200 (Overall Objectives, issued October 2009 and amended to June 2020) and ASA 700 (Forming an Opinion and Reporting, issued December 2015 and amended to June 2020) (Objective para. 5; Main Features). The instrument notes that it does not introduce new definitions (para. 6).
Specific textual amendments: The Standard amends ASA 200 paragraph A56 to restate the effective date rule (para. 8). It makes multiple amendments to ASA 700, including changes to the “Conformity with International Standards on Auditing” text to add items that are additional to ISA 700 (paras. 9-10), inserts a new sub-heading and paragraph Aus 42.1 requiring recording of an early‑adoption election in the auditor’s report (paras. 11-12), inserts Aus A57.2 to provide guidance on early adoption and the requirement to early adopt conforming and consequential amendments (paras. 13-14), and inserts a new footnote referencing ASA 200 paragraph A56 and ASA 101 Preamble paragraphs A33-A35 (para. 15).
Drafting and presentation conventions: The Standard explains it uses underlining and striking out in the published amending text to make amendments understandable, but those editorial devices are not themselves part of the Standard (para. 7). That is a drafting housekeeping note relevant when comparing pre‑ and post‑amendment texts.
Precedent materials: The Standard acknowledges the revised ASA 101 Preamble (September 2021) as the immediate catalyst for these consequential and conforming amendments (paras. 4, Reasons for Issuing, Main Features).
No new substantive standards: The instrument explicitly states it does not introduce new definitions or new substantive auditing subject matter (para. 6). It confines itself to procedural and cross‑reference changes.
The amendment history therefore positions ASA 2021-3 as a short, focused amending instrument published shortly after the ASA 101 Preamble revision, designed to bring ASA 200 and ASA 700 into conformity with the revised preamble and to clarify early adoption reporting mechanics and related cross‑references.
Litigation history
The text of ASA 2021-3 contains no references to any litigation, cases, regulatory determinations or judicial decisions. It does not cite any court or tribunal authority, nor does it record any disputes about earlier drafts or implementation. The instrument is a standards amendment; its content is limited to textual changes and explanatory material and does not record legal challenges.
From a risk and compliance perspective, two observations flow from the absence of litigation references within the Standard:
No settled statutory or judicial construction within the instrument: Because the Standard does not cite case law or judicial interpretations, auditors cannot rely on precedent distilled within the Standard itself to interpret the new reporting obligations. Instead, auditors will need to rely on the text of the amended standards, ASA 101 Preamble guidance, and any subsequent regulatory guidance or enforcement actions by ASIC or professional bodies for authoritative interpretive guidance.
Potential for future disputes: The instrument creates new, albeit procedural, obligations (for example, to record early‑adoption elections in the auditor’s report and to adopt all conforming amendments). Those obligations could be the subject of future regulatory review or litigation if an auditor’s practice departs from what a court or regulator later considers required. The Standard does not anticipate or resolve such disputes in its text.
Practitioners should therefore note the lack of litigation history in the instrument itself and plan for the possibility that clarifying applications and enforcement positions may be developed by regulators or courts over time. Until such external interpretations emerge, the Standard and its referenced sources (ASA 200, ASA 700, ASA 706, ASA 101 Preamble and the Corporations Act provisions cited in the Authority Statement) constitute the primary textual authority for compliance.
Gotchas
The Standard is concise but contains several practical traps and friction points that can cause implementation errors if not anticipated. Key gotchas, tied to the instrument’s paragraphs, are:
Early adoption requires full uptake of conforming/consequential amendments (Aus A57.2; para. 14). Practitioners might assume they can cherry‑pick a single substantive provision from a newly issued Auditing Standard and adopt it immediately. The Standard requires that all relevant conforming and consequential amendments be early adopted as well. That means a seemingly small change in one standard can trigger a package of related amendments across multiple standards, increasing the implementation burden.
Election to early adopt must be recorded in the auditor’s report if the standard is made under s. 336 (Aus 42.1; para. 12). Firms that early adopt but fail to record the election expose themselves to questions about conformity with the Standard. The text is mandatory in tone: the election "is required to be recorded in the auditor’s report."
If recording the election as an Other Matter paragraph, ASA 706 procedural rules apply (Aus A57.2; para. 14). ASA 706 imposes constraints and form requirements for Other Matter paragraphs; auditors must ensure they follow ASA 706's requirements rather than treating the Other Matter paragraph as freeform disclosure.
Default prohibition on applying standards before their effective date (ASA 200 A56; para. 8). Some standards may include their own early‑adoption allowance. The amended ASA 200 paragraph A56 restates that the auditor is not permitted to apply an Auditing Standard before the effective date unless the standard permits it. Auditors need to check each standard’s operative text to determine whether early adoption is permitted and, if so, what limitations apply.
Website reference specificity (Aus A57.1; para. 10). When auditors refer investors or readers to a website description of auditor responsibilities, the Standard requires the AUASB and its website address to be identified. Firms that reference their own or other materials without referencing the AUASB may not be following the Standard’s guidance.
No new definitions introduced (para. 6). The Standard says it introduces no new definitions; auditors must not assume new terminology is defined by ASA 2021-3. Definitions remain in the individual Auditing Standards and the AUASB Glossary. Misreading could lead to inconsistent application.
Operative date is period‑commencement based (para. 3). The Standard is operative for financial reporting periods commencing on or after 1 October 2021. Practitioners accustomed to effective dates tied to financial statement dates should note the commencement rule: an audit covering a period that began before 1 October 2021 may not be subject to the Standard even if the reporting date is later.
The Standard is a legislative instrument but does not itself state enforcement measures (Preface; Authority Statement). Users may misread the absence of penalties in the Standard as implying leniency. In practice, the Standard’s authority under the Corporations Act and its classification as a legislative instrument mean non‑compliance can have consequences determined elsewhere in the statutory and regulatory regime.
Cross‑reference complexity: The Standard cross‑refers to ASA 200 (A56), ASA 101 Preamble (A33-A35), ASA 706 and ASA 700 (multiple paragraphs). Implementing the changes requires careful cross‑checking and potential updates to engagement checklists, report templates and firm policies. Missing one cross‑reference could lead to partial compliance errors.
Editorial drafting conventions are not part of the operative text (para. 7). The instrument uses underlining and striking out in the amending text. Auditors must ensure they implement the final amended text as it will appear in consolidated standards rather than copying editorial marks into client reports or policies.
Practically, these gotchas point to the need for a disciplined implementation plan: mapping all related standards and amendments, updating templates, training staff about recording elections, and establishing a review step to ensure all conforming/consequential amendments have been considered when early adopting.
How to comply
Compliance with ASA 2021-3 is largely procedural and documentational. Below is a practical checklist, grounded in the Standard’s text, to assist audit firms and engagement teams in meeting the Standard’s obligations.
Confirm applicability and operative date
Determine whether the engagement is within the Standard’s scope: audits of financial reports under the Corporations Act (financial year or half‑year) and audits of financial reports or complete sets of financial statements for other purposes (Application paras. 1-2).
Confirm whether the financial reporting period commences on or after 1 October 2021; the Standard is operative for such periods (Operative Date para. 3).
Decide on early adoption policy
If considering early adoption of an AUASB standard made under s. 336, confirm the specific standard permits early adoption (ASA 200 A56 as amended; para. 8). Where no specific permission exists, the default in Aus A57.2 is that the auditor is permitted to apply the standard before the operative date unless the Auditing Standard states otherwise (para. 14).
Maintain a firm policy documenting who in the firm can make early‑adoption decisions and the process for evaluating conforming/consequential amendments.
Identify and adopt all relevant conforming/consequential amendments
When early adopting, ensure that all relevant conforming and consequential amendments are also early adopted (Aus A57.2; para. 14). This requires mapping the full set of interconnected amendments that accompany the new standard, including changes to ASA 200, ASA 700, ASA 706, ASA 101 and others.
Document the election to early adopt and record it in the auditor’s report
Where the early adoption is of a standard made under s. 336 and the firm elects to early adopt in accordance with s. 336(4), record that election in the auditor’s report as required by Aus 42.1 (para. 12).
Decide whether to record the election as an Other Matter paragraph. If choosing that route, apply ASA 706’s requirements and guidance for Other Matter paragraphs (Aus A57.2; para. 14).
Update auditor’s report templates and basis‑for‑opinion wording
Incorporate a standardised disclosure or paragraph template to record early‑adoption elections so that the audit report consistently reflects the election where relevant.
Ensure the basis for opinion identifies the relevant Australian ethical requirements applicable in the engagement, consistent with Aus 28.1(c) as noted in the amendments (para. 9). Review and update basis‑for‑opinion wording accordingly.
Use AUASB reference when linking to web descriptions
When including or referring to a description of auditor responsibilities on a website, ensure the wording identifies the AUASB and its website address, consistent with Aus A57.1 (para. 10). Update any report language or website references to use the AUASB as the authoritative referent.
Train engagement teams and update internal manuals
Provide targeted training to audit partners, engagement leaders and reporting staff about the new procedural duties: the need to record early‑adoption elections, the requirement to adopt consequential amendments, and the ASA 200 effective date rule.
Update quality‑control checklists and engagement documentation checklists to include steps verifying early‑adoption permissions, adoption of conforming amendments, and inclusion of the election in the auditor’s report.
Quality control and review
Incorporate a stage in engagement quality control review to confirm that (a) the early‑adoption decision is documented and justified, (b) all relevant conforming/consequential amendments have been applied, and (c) the auditor’s report includes the required election disclosure and any website references correctly identify the AUASB.
Coordinate with audit committees and clients
Inform audit committees and management about the decision to early adopt an Auditing Standard when relevant, especially because the auditor’s report must disclose the election. That communication should explain the implications and the content of the disclosure.
Maintain regulatory and interpretive watch
Monitor AUASB, ASIC and professional body communications for any interpretive guidance, examples of acceptable wording for the election disclosure, or practice notes about early adoption and related reporting. ASA 2021-3 itself does not provide model wording for the election disclosure.
Documentation retention
Retain evidence of the decision-making process for early adoption, the mapping of conforming amendments, and the quality-control review. These records will be relevant to internal and external reviewers, regulators or in the event of disputes.
Cross‑reference verification
Check ASA 101 Preamble paragraphs A33-A35 as referenced in the footnote inserted by ASA 2021-3 (para. 15) for further guidance on applying early‑adoption rules and how they interact with ASA 200’s effective date rule.
By following these steps, audit firms can translate the procedural requirements of ASA 2021-3 into practice. The central operational implications are documentation and reporting: an affirmative decision to early adopt must be tracked, justified, and disclosed in the auditor’s report, and related standards and templates must be updated to reflect the change.
Practically, the highest compliance risks lie in failing to adopt related conforming amendments, failing to record the early‑adoption election in the auditor’s report where required, and failing to respect ASA 706 constraints when using an Other Matter paragraph to convey the election. A disciplined, documented firm policy and an engagement-level checklist are the most direct risk‑mitigation measures consistent with the Standard’s text.
Requests and enquiries concerning reproduction and rights for commercial purposes should be addressed to the Technical Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to enquiries@auasb.gov.au. Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.
ISSN 1833-4393
CONTENTS
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Amendments to Auditing Standards..............................................7
Amendments to ASA 200.......................................................8
Amendments to ASA 700.......................................................9-15
preface
Reasons for Issuing ASA 2021-3
The Australian Auditing and Assurance Board (AUASB) issues Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is a non-corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
Main Features
This Auditing Standard makes amendments to the requirements and application and other explanatory material of the following Auditing Standards:
ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (issued October 2009 and amended to June 2020)
ASA 700 Forming an Opinion and Reporting on a Financial Report (issued December 2015 and amended to June 2020)
These amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards in September 2021. Under its mandate, the AUASB is required to maintain the quality and relevance of the Auditing Standards. Accordingly, amendments to existing Auditing Standards are made whenever necessary to correct editorial issues or to resolve conflicts between standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
Dated: 7 September 2021 W R Edge
Chair - AUASB
Conformity with International Standards on Auditing
This Auditing Standard has been made for Australian legislative purposes and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Reasons for Issuing ASA 2021-3 Reasons for Issuing ASA 2021-3
Reasons for Issuing ASA 2021-3
The Australian Auditing and Assurance Board (AUASB) issues Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.
The AUASB is a non-corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act). Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation. These Auditing Standards are legislative instruments under the Legislation Act 2003.
Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.
Main Features Main Features
Main Features
This Auditing Standard makes amendments to the requirements and application and other explanatory material of the following Auditing Standards:
ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (issued October 2009 and amended to June 2020)
ASA 700 Forming an Opinion and Reporting on a Financial Report (issued December 2015 and amended to June 2020)
These amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards in September 2021. Under its mandate, the AUASB is required to maintain the quality and relevance of the Auditing Standards. Accordingly, amendments to existing Auditing Standards are made whenever necessary to correct editorial issues or to resolve conflicts between standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
Dated: 7 September 2021 W R Edge
Chair - AUASB
Conformity with International Standards on Auditing
This Auditing Standard has been made for Australian legislative purposes and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
AUTHORITY STATEMENT AUTHORITY STATEMENT
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2021-3 Amendments to Australian Auditing Standards pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001.
Conformity with International Standards Conformity with International Standards on Auditing
Conformity with International Standards on Auditing
This Auditing Standard has been made for Australian legislative purposes and accordingly there is no equivalent International Standard on Auditing (ISA) issued by the International Auditing and Assurance Standards Board (IAASB), an independent standard‑setting board of the International Federation of Accountants (IFAC).
Auditing Standard ASA 2021-3 Auditing Standard ASA 2021-3
Auditing Standard ASA 2021-3
Amendments to Australian Auditing Standards
Application
This Auditing Standard applies to:
an audit of a financial report for a financial year, or an audit of a financial report for a half-year, in accordance with the Corporations Act 2001; and
an audit of a financial report, or a complete set of financial statements, for any other purpose.
This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.
Operative Date
This Auditing Standard is operative for financial reporting periods commencing on or after 1 October 2021.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments are consequential and conforming amendments arising from the issuance of the revised ASA 101 Preamble to AUASB Standards (September 2021).
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
(a) ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards (Issued October 2009 and amended to June 2020)
(b) ASA 700 Forming an Opinion and Reporting on a Financial Report (Issued December 2015 and amended to June 2020)
Definition
For the purposes of this Auditing Standard, the meanings of terms are set out in each Auditing Standard and in the AUASB Glossary. This Auditing Standard does not introduce new definitions.
Amendments to Auditing Standards
This Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Amended paragraphs are shown with deleted text struck through and new text underlined. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.
Amendments to ASA 200
Existing paragraph A56 is amended to read as follows:
The scope, effective date and any specific limitation of the applicability of a specific Auditing Standard is made clear in the Auditing Standard. Unless otherwise stated in the Auditing Standard, the auditor is not permitted to apply an Auditing Standard before the effective date specified therein.
Amendments to ASA 700
The existing third paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following requirements are additional to ISA 700:
Paragraph Aus 28.1(c) requires the auditor to identify the relevant ethical requirements applicable within Australia when providing the basis for opinion.
Aus 42.1 requires that when the auditor elects to early adopt an Auditing Standard made under 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
…
The existing fourth paragraph of “Conformity with International Standards on Auditing” is amended to read as follows:
The following application and other explanatory material is additional to ISA 700:
Paragraph Aus A57.1 identifies the Auditing and Assurance Standards Board and its website address when an auditor refers to a description of the auditor’s responsibilities on a website.
Paragraph Aus A57.2 includes guidance on how the election to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001 could be reported in the auditor’s report and includes a reference to ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report for further requirements and guidance relevant to Other Matter paragraphs.
…
Following existing paragraph 42, and before the sub-heading “Other Reporting Responsibilities”, the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus 42.1 is inserted:
When the auditor elects to early adopt an Auditing Standard made under section 336 of the Corporations Act 2001, in accordance with section 336(4) of that Act, that election is required to be recorded in the auditor’s report.
Following existing paragraph Aus A57.1, and before the sub-heading “Other Reporting Responsibilities (Ref: Para. 43-45)” the following sub-heading is inserted:
Early adoption of Auditing Standards
Following the sub-heading inserted above, the following paragraph Aus A57.2 is inserted:
Unless otherwise stated in an Auditing Standard, the auditor is permitted to apply the standard before the operative date specified therein. Where an Auditing Standard is early adopted, all relevant conforming and consequential amendments must
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