Auditing Standard ASA 2022-2 Amendments to Australian Auditing Standards
In ForceCTH
Jurisdiction
Commonwealth
Collection
legislative instrument
Plain English Summary
5/10 complexity
This amending standard updates Australian review-audit rules (mainly ASRE 2410 and ASRE 2415) so engagement-level practice aligns with recent quality‑management and risk-assessment standards (ASQM 1/2, ASA 220, ASA 315). Mechanically, it requires auditors and firms to apply their firm quality‑management procedures and to obtain or update an understanding of the entity and its internal controls for annual and interim/review engagements. It affects audit firms, practitioners who perform reviews, and the entities they audit; operative date: reporting periods commencing on or after 15 December 2022.
This instrument, Auditing Standard ASA 2022-2 Amendments to Australian Auditing Standards, makes targeted amendments to existing Australian auditing standards to align them with recent international quality management and auditing revisions. The AUASB issued the standard under its statutory powers (s 227B Australian Securities and Investments Commission Act 2001 and s 336 Corporations Act 2001) and dated the instrument 13 December 2022. It is operative for financial reporting periods commencing on or after 15 December 2022 (Operative Date, paras 1-3; Authority Statement).
Mechanically, ASA 2022-2 does not create a stand-alone new standard; it amends specific paragraphs and explanatory material in ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (issued 9 June 2020) and ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (issued 30 June 2010, amended 5 November 2021) (Objective, paras 1-1.2). The changes are primarily consequential and conforming, said to arise from the issuance of ASQM 1, ASQM 2, ASA 220 (revised), and ASA 315 (Revised) (Introduction; Scope).
Textually, the amendments do a number of specific things: they require auditors to implement the firm’s quality controlmanagement procedures applicable to individual engagements (amending paragraph 9 of ASRE 2410 and paragraph 12 of ASRE 2415); they expand and emphasise the auditor’s obligation to obtain and update an understanding of the entity and its environment and its system of internal control as it relates to preparation of annual and interim or other financial reports (amending paras 13, 14, and multiple application paragraphs A4, A9-A11, A19, A21 of ASRE 2410); and they amend footnote references to quality controlmanagement guidance to point to ASQCM 1 and ASA 220 (Amendments to ASRE 2410 and ASRE 2415 sections).
Current sections
Direct links to the current provisions in Auditing Standard ASA 2022-2 Amendments to Australian Auditing Standards.
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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 BoardLevel 20, 500 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............................................7-8
Amendments to ASRE 2410...................................................9-19
Amendments to ASRE 2415..................................................20-21
preface
Reasons for Issuing ASA 2022-2
The AUASB issues Auditing Standard ASA 2022-2 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 & other explanatory material of the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
The amendments arise from changes made by the International Auditing and Assurance Standards Board (IAASB) to ISQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, ISQM 2 Engagement Quality Reviews, ISA 220 (Revised) Quality Management for an Audit of Financial Statements and ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement. Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required to have regard to any programme initiated by the IAASB for the revision and enhancement of the International Standards on Auditing (ISAs) and to make appropriate consequential amendments to the Australian Auditing Standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2022-2 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: 13 December 2022 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 2022-2
Reasons for Issuing ASA 2022-2
Reasons for Issuing ASA 2022-2
The AUASB issues Auditing Standard ASA 2022-2 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 & other explanatory material of the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
The amendments arise from changes made by the International Auditing and Assurance Standards Board (IAASB) to ISQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, ISQM 2 Engagement Quality Reviews, ISA 220 (Revised) Quality Management for an Audit of Financial Statements and ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement. Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required to have regard to any programme initiated by the IAASB for the revision and enhancement of the International Standards on Auditing (ISAs) and to make appropriate consequential amendments to the Australian Auditing Standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2022-2 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: 13 December 2022 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 2022-2 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 2022-2
Auditing Standard ASA 2022-2
Auditing Standard ASA 2022-2
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 15 December 2022.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments arise from consequential and conforming changes arising from the issuance of ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements, ASQM 2 Engagement Quality Reviews, ASA 220 Quality Management for an Audit of a Financial Report and Other Historical Financial Information and ASA 315 Identifying and Assessing the Risks of Material Misstatement.
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
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
Where relevant, this Standard uses underlining, striking out and other typographical material to identify 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.
Where this amending standard inserts or deletes a paragraph or footnote, as a result of that insertion or deletion relevant paragraph numbers, cross-references and footnotes are updated.
Amendments to ASRE 2410
Existing paragraph 9 is amended to read as follows:
The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement.
Existing paragraph 13 is amended to read as follows:
The auditor shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports, sufficient to plan and conduct the engagement so as to be able to:
…
Existing paragraph 14 is amended to read as follows:
In order to plan and conduct a review of a financial report, a recently appointed auditor, who has not yet performed an audit of the annual financial report in accordance with Australian Auditing Standards, shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports.
Existing paragraph A4 is amended to read as follows:
Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control. When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of a financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410* , as the practitioner ordinarily does not have the same understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as the auditor of the entity.
…
Existing paragraph A6 is amended to read as follows:
The elements of quality controlmanagement that are relevant to an individual engagement include leadership responsibilities for managing and achieving quality on the engagement, relevant ethical requirements, acceptance and continuance of client relationships and specific engagements, assignment of engagement teamsengagement resources, engagement performance, and monitoring and remediation. ASQCM 1 and ASA 2206 include guidance that may be helpful.
Existing footnote 6 in paragraph A6 is amended to read as follows:
See ASQCM 1 Quality ControlManagement for Firms that Perform Audits andor Reviews of Financial Reports and Other Financial Information, andor Other Assurance or Related Services Engagements and ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information.
Existing paragraph A9 is amended to read as follows:
Under ASA 315 Identifying and Assessing the Risks of Material Misstatement, the auditor who has audited the entity’s financial report for one or more annual periods has obtained an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of the annual financial report, that was sufficient to conduct the audit. In planning a review of a financial report, the auditor needs to update this understanding. The auditor also needs to obtain a sufficient understanding of the entity’s system of internal control as it relates to the preparation of the financial report subject to review, as it may differ from internal control as it relates to the preparation of the annual financial report.
Existing paragraph A10 is amended to read as follows:
The auditor needs to use the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, to determine the enquiries to be made and the analytical and other review procedures to be applied, and to identify the particular events, transactions or assertions to which enquiries may be directed or analytical or other review procedures applied.
Existing paragraph A11 is amended to read as follows:
The procedures performed by the auditor to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, ordinarily include the following:
…
(j) enquiring of management and of other appropriate individuals within the entity about the effect of changes in the entity’s business activities;
…
Existing paragraph A19 is amended to read as follows:
A review ordinarily does not require tests of the accounting records through inspection, observation or confirmation. Procedures for performing a review of a financial report ordinarily are limited to making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures, rather than corroborating information obtained concerning matters relating to the financial report. The auditor’s understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, the results of the risk assessments relating to the preceding audit and the auditor’s consideration of materiality as it relates to the financial report, affects the nature and extent of the enquiries made, and analytical and other review procedures applied.
Existing paragraph A21 is amended to read as follows:
The auditor may perform many of the review procedures before or simultaneously with the entity’s preparation of the financial report. For example, it may be practicable to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, and begin reading applicable minutes before the end of the period. Performing some of the review procedures earlier in the period also permits early identification and consideration of significant accounting matters affecting the financial report.
Amendments to ASRE 2415
Existing paragraph 12 is amended to read as follows:
The auditor shall implement the firm’s policies or quality control procedures that are applicable to the individual engagement.5
Existing footnote 5 in paragraph 12 is amended to read as follows:
See ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information, as amended, which may be helpful in determining quality controlmanagement procedures appropriate to a review engagement.
Amendments to Australian Auditing Standa
Amendments to Australian Auditing Standards
Auditing Standard ASA 2022-2
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 15 December 2022.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments arise from consequential and conforming changes arising from the issuance of ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements, ASQM 2 Engagement Quality Reviews, ASA 220 Quality Management for an Audit of a Financial Report and Other Historical Financial Information and ASA 315 Identifying and Assessing the Risks of Material Misstatement.
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
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
Where relevant, this Standard uses underlining, striking out and other typographical material to identify 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.
Where this amending standard inserts or deletes a paragraph or footnote, as a result of that insertion or deletion relevant paragraph numbers, cross-references and footnotes are updated.
Amendments to ASRE 2410
Existing paragraph 9 is amended to read as follows:
The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement.
Existing paragraph 13 is amended to read as follows:
The auditor shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports, sufficient to plan and conduct the engagement so as to be able to:
…
Existing paragraph 14 is amended to read as follows:
In order to plan and conduct a review of a financial report, a recently appointed auditor, who has not yet performed an audit of the annual financial report in accordance with Australian Auditing Standards, shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports.
Existing paragraph A4 is amended to read as follows:
Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control. When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of a financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410* , as the practitioner ordinarily does not have the same understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as the auditor of the entity.
…
Existing paragraph A6 is amended to read as follows:
The elements of quality controlmanagement that are relevant to an individual engagement include leadership responsibilities for managing and achieving quality on the engagement, relevant ethical requirements, acceptance and continuance of client relationships and specific engagements, assignment of engagement teamsengagement resources, engagement performance, and monitoring and remediation. ASQCM 1 and ASA 2206 include guidance that may be helpful.
Existing footnote 6 in paragraph A6 is amended to read as follows:
See ASQCM 1 Quality ControlManagement for Firms that Perform Audits andor Reviews of Financial Reports and Other Financial Information, andor Other Assurance or Related Services Engagements and ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information.
Existing paragraph A9 is amended to read as follows:
Under ASA 315 Identifying and Assessing the Risks of Material Misstatement, the auditor who has audited the entity’s financial report for one or more annual periods has obtained an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of the annual financial report, that was sufficient to conduct the audit. In planning a review of a financial report, the auditor needs to update this understanding. The auditor also needs to obtain a sufficient understanding of the entity’s system of internal control as it relates to the preparation of the financial report subject to review, as it may differ from internal control as it relates to the preparation of the annual financial report.
Existing paragraph A10 is amended to read as follows:
The auditor needs to use the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, to determine the enquiries to be made and the analytical and other review procedures to be applied, and to identify the particular events, transactions or assertions to which enquiries may be directed or analytical or other review procedures applied.
Existing paragraph A11 is amended to read as follows:
The procedures performed by the auditor to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, ordinarily include the following:
…
(j) enquiring of management and of other appropriate individuals within the entity about the effect of changes in the entity’s business activities;
…
Existing paragraph A19 is amended to read as follows:
A review ordinarily does not require tests of the accounting records through inspection, observation or confirmation. Procedures for performing a review of a financial report ordinarily are limited to making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures, rather than corroborating information obtained concerning matters relating to the financial report. The auditor’s understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, the results of the risk assessments relating to the preceding audit and the auditor’s consideration of materiality as it relates to the financial report, affects the nature and extent of the enquiries made, and analytical and other review procedures applied.
Existing paragraph A21 is amended to read as follows:
The auditor may perform many of the review procedures before or simultaneously with the entity’s preparation of the financial report. For example, it may be practicable to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, and begin reading applicable minutes before the end of the period. Performing some of the review procedures earlier in the period also permits early identification and consideration of significant accounting matters affecting the financial report.
Amendments to ASRE 2415
Existing paragraph 12 is amended to read as follows:
The auditor shall implement the firm’s policies or quality control procedures that are applicable to the individual engagement.5
Existing footnote 5 in paragraph 12 is amended to read as follows:
See ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information, as amended, which may be helpful in determining quality controlmanagement procedures appropriate to a review engagement.
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 15 December 2022.
Introduction
Introduction
Auditing Standard ASA 2022-2
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 15 December 2022.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments arise from consequential and conforming changes arising from the issuance of ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements, ASQM 2 Engagement Quality Reviews, ASA 220 Quality Management for an Audit of a Financial Report and Other Historical Financial Information and ASA 315 Identifying and Assessing the Risks of Material Misstatement.
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
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
Where relevant, this Standard uses underlining, striking out and other typographical material to identify 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.
Where this amending standard inserts or deletes a paragraph or footnote, as a result of that insertion or deletion relevant paragraph numbers, cross-references and footnotes are updated.
Amendments to ASRE 2410
Existing paragraph 9 is amended to read as follows:
The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement.
Existing paragraph 13 is amended to read as follows:
The auditor shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports, sufficient to plan and conduct the engagement so as to be able to:
…
Existing paragraph 14 is amended to read as follows:
In order to plan and conduct a review of a financial report, a recently appointed auditor, who has not yet performed an audit of the annual financial report in accordance with Australian Auditing Standards, shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports.
Existing paragraph A4 is amended to read as follows:
Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control. When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of a financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410* , as the practitioner ordinarily does not have the same understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as the auditor of the entity.
…
Existing paragraph A6 is amended to read as follows:
The elements of quality controlmanagement that are relevant to an individual engagement include leadership responsibilities for managing and achieving quality on the engagement, relevant ethical requirements, acceptance and continuance of client relationships and specific engagements, assignment of engagement teamsengagement resources, engagement performance, and monitoring and remediation. ASQCM 1 and ASA 2206 include guidance that may be helpful.
Existing footnote 6 in paragraph A6 is amended to read as follows:
See ASQCM 1 Quality ControlManagement for Firms that Perform Audits andor Reviews of Financial Reports and Other Financial Information, andor Other Assurance or Related Services Engagements and ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information.
Existing paragraph A9 is amended to read as follows:
Under ASA 315 Identifying and Assessing the Risks of Material Misstatement, the auditor who has audited the entity’s financial report for one or more annual periods has obtained an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of the annual financial report, that was sufficient to conduct the audit. In planning a review of a financial report, the auditor needs to update this understanding. The auditor also needs to obtain a sufficient understanding of the entity’s system of internal control as it relates to the preparation of the financial report subject to review, as it may differ from internal control as it relates to the preparation of the annual financial report.
Existing paragraph A10 is amended to read as follows:
The auditor needs to use the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, to determine the enquiries to be made and the analytical and other review procedures to be applied, and to identify the particular events, transactions or assertions to which enquiries may be directed or analytical or other review procedures applied.
Existing paragraph A11 is amended to read as follows:
The procedures performed by the auditor to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, ordinarily include the following:
…
(j) enquiring of management and of other appropriate individuals within the entity about the effect of changes in the entity’s business activities;
…
Existing paragraph A19 is amended to read as follows:
A review ordinarily does not require tests of the accounting records through inspection, observation or confirmation. Procedures for performing a review of a financial report ordinarily are limited to making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures, rather than corroborating information obtained concerning matters relating to the financial report. The auditor’s understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, the results of the risk assessments relating to the preceding audit and the auditor’s consideration of materiality as it relates to the financial report, affects the nature and extent of the enquiries made, and analytical and other review procedures applied.
Existing paragraph A21 is amended to read as follows:
The auditor may perform many of the review procedures before or simultaneously with the entity’s preparation of the financial report. For example, it may be practicable to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, and begin reading applicable minutes before the end of the period. Performing some of the review procedures earlier in the period also permits early identification and consideration of significant accounting matters affecting the financial report.
Amendments to ASRE 2415
Existing paragraph 12 is amended to read as follows:
The auditor shall implement the firm’s policies or quality control procedures that are applicable to the individual engagement.5
Existing footnote 5 in paragraph 12 is amended to read as follows:
See ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information, as amended, which may be helpful in determining quality controlmanagement procedures appropriate to a review engagement.
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 arise from consequential and conforming changes arising from the issuance of ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements, ASQM 2 Engagement Quality Reviews, ASA 220 Quality Management for an Audit of a Financial Report and Other Historical Financial Information and ASA 315 Identifying and Assessing the Risks of Material Misstatement.
Objective
Objective
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
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
Where relevant, this Standard uses underlining, striking out and other typographical material to identify 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.
Where this amending standard inserts or deletes a paragraph or footnote, as a result of that insertion or deletion relevant paragraph numbers, cross-references and footnotes are updated.
Amendments to ASRE 2410
Amendments to ASRE 2410
Amendments to ASRE 2410
Existing paragraph 9 is amended to read as follows:
The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement.
Existing paragraph 13 is amended to read as follows:
The auditor shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports, sufficient to plan and conduct the engagement so as to be able to:
…
Existing paragraph 14 is amended to read as follows:
In order to plan and conduct a review of a financial report, a recently appointed auditor, who has not yet performed an audit of the annual financial report in accordance with Australian Auditing Standards, shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports.
Existing paragraph A4 is amended to read as follows:
Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control. When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of a financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410* , as the practitioner ordinarily does not have the same understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as the auditor of the entity.
…
Existing paragraph A6 is amended to read as follows:
The elements of quality controlmanagement that are relevant to an individual engagement include leadership responsibilities for managing and achieving quality on the engagement, relevant ethical requirements, acceptance and continuance of client relationships and specific engagements, assignment of engagement teamsengagement resources, engagement performance, and monitoring and remediation. ASQCM 1 and ASA 2206 include guidance that may be helpful.
Existing footnote 6 in paragraph A6 is amended to read as follows:
See ASQCM 1 Quality ControlManagement for Firms that Perform Audits andor Reviews of Financial Reports and Other Financial Information, andor Other Assurance or Related Services Engagements and ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information.
Existing paragraph A9 is amended to read as follows:
Under ASA 315 Identifying and Assessing the Risks of Material Misstatement, the auditor who has audited the entity’s financial report for one or more annual periods has obtained an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of the annual financial report, that was sufficient to conduct the audit. In planning a review of a financial report, the auditor needs to update this understanding. The auditor also needs to obtain a sufficient understanding of the entity’s system of internal control as it relates to the preparation of the financial report subject to review, as it may differ from internal control as it relates to the preparation of the annual financial report.
Existing paragraph A10 is amended to read as follows:
The auditor needs to use the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, to determine the enquiries to be made and the analytical and other review procedures to be applied, and to identify the particular events, transactions or assertions to which enquiries may be directed or analytical or other review procedures applied.
Existing paragraph A11 is amended to read as follows:
The procedures performed by the auditor to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, ordinarily include the following:
…
(j) enquiring of management and of other appropriate individuals within the entity about the effect of changes in the entity’s business activities;
…
Existing paragraph A19 is amended to read as follows:
A review ordinarily does not require tests of the accounting records through inspection, observation or confirmation. Procedures for performing a review of a financial report ordinarily are limited to making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures, rather than corroborating information obtained concerning matters relating to the financial report. The auditor’s understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, the results of the risk assessments relating to the preceding audit and the auditor’s consideration of materiality as it relates to the financial report, affects the nature and extent of the enquiries made, and analytical and other review procedures applied.
Existing paragraph A21 is amended to read as follows:
The auditor may perform many of the review procedures before or simultaneously with the entity’s preparation of the financial report. For example, it may be practicable to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, and begin reading applicable minutes before the end of the period. Performing some of the review procedures earlier in the period also permits early identification and consideration of significant accounting matters affecting the financial report.
Amendments to ASRE 2415
Amendments to ASRE 2415
Amendments to ASRE 2415
Existing paragraph 12 is amended to read as follows:
The auditor shall implement the firm’s policies or quality control procedures that are applicable to the individual engagement.5
Existing footnote 5 in paragraph 12 is amended to read as follows:
See ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information, as amended, which may be helpful in determining quality controlmanagement procedures appropriate to a review engagement.
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
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ISSN 1833-4393
CONTENTS CONTENTS
CONTENTS
PREFACE
AUTHORITY STATEMENT
CONFORMITY WITH INTERNATIONAL STANDARDS ON AUDITING
Amendments to Auditing Standards............................................7-8
Amendments to ASRE 2410...................................................9-19
The instrument expressly does not introduce new definitions and directs users to the AUASB Glossary and the existing standards for meanings (Definition). The amending text also explains the editorial convention used in the amending instrument,underlining, striking out, ellipses,to indicate changes for ease of reading, while noting those typographic marks are not part of the final amended standards (Amendments to Auditing Standards, paras 1-2).
The AUASB sets out the purpose claims for this change: to achieve consequential and conforming amendments arising from international standard revisions and to maintain alignment under the Financial Reporting Council’s Strategic Direction (Preface, Reasons for Issuing). The instrument is described as a legislative instrument under the Legislation Act 2003 (Preface).
Main concepts
The document revolves around five interlocking concepts: quality management at the firm and engagement level, the auditor’s understanding of the entity and its environment (including internal control), the scope and nature of review engagements, conformity with international standard-setting developments, and operative application timing.
Quality controlmanagement procedures: The amendments substitute or expand references to the firm’s quality control or quality management arrangements that are to be implemented at the engagement level. For example, ASRE 2410 paragraph 9 becomes "The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement." Similarly, ASRE 2415 paragraph 12 is amended to require implementation of "the firm’s policies or quality control procedures that are applicable to the individual engagement." The explanatory material lists the elements of quality controlmanagement relevant to an engagement,leadership responsibilities, ethical requirements, acceptance and continuance, assignment of engagement teamsengagement resources, engagement performance, monitoring and remediation (Amendments to ASRE 2410, paras 1; A6).
Understanding of the entity and its environment, including internal control: Paragraphs 13 and 14 of ASRE 2410 are amended to make explicit that the auditor must obtain an understanding of the entity, the applicable financial reporting framework, and the entity’s system of internal control as it relates to preparation of both annual and interim or other financial reports, sufficient to plan and conduct the engagement. The application material clarifies that an auditor who has previously audited annual financial reports should update that understanding in planning a review, and that a recently appointed auditor who has not performed an audit must obtain the same understanding (Amendments to ASRE 2410, paras 1-4; A4; A9).
Nature and limits of a review engagement: The standard reiterates that a review ordinarily does not require tests of accounting records by inspection, observation or confirmation; review procedures are ordinarily limited to enquiries and analytical and other review procedures rather than corroborative testing. However, the auditor’s understanding of the entity, prior audit risk assessments, and materiality affect the nature and extent of enquiries and procedures (A19).
Conformity with international revisions: The AUASB frames the amendments as consequential and conforming adjustments in response to the IAASB’s changes to ISQM 1, ISQM 2, ISA 220 (Revised), and ISA 315 (Revised). The AUASB states it must have regard to IAASB programmes under the FRC Strategic Direction (Preface; Main Features).
Application and timing: The amending standard applies to audits of financial reports under the Corporations Act and other audits of financial reports or complete sets of financial statements, and as appropriate to audits of other historical financial information. It is operative for reporting periods commencing on or after 15 December 2022 (Application, Operative Date).
These concepts alter obligations at both firm and engagement levels: firms must maintain, and auditors implement, the specified quality controlmanagement elements for each engagement; auditors must advance their entity-level understanding to include interim reports and update that understanding for reviews; review procedure scope remains enquiry and analytical focused but shaped by updated entity understanding and prior audit risk assessments. The standard does not add novel definitions; it integrates the amendments into existing Australian standards and the AUASB Glossary (Definition; Amendments).
Who it affects
The instrument identifies and affects several actor groups in the Australian audit and assurance ecosystem. The principal categories are auditors (both those engaged in audits and those performing reviews), firms that perform audits or reviews, practitioners engaged to perform reviews who are not the entity's auditor, and entities subject to audited or reviewed financial reporting under the Corporations Act and other regimes.
Auditors of financial reports: The standard expressly applies to audits of financial reports for a financial year and half-year under the Corporations Act and to audits of financial reports or complete sets of financial statements for other purposes. It also applies, as appropriate, to audits of other historical financial information (Application, paras 1-2). This group now has an explicit engagement-level obligation to implement the firm’s applicable quality controlmanagement procedures and to obtain a specified understanding of the entity and its internal control as it relates to both annual and interim or other financial reports (Amendments to ASRE 2410, paras 9, 13).
Auditors performing reviews: The primary targets of the amended ASRE 2410 and ASRE 2415 provisions are auditors performing review engagements. The amendments clarify the expectation that auditors update or obtain an understanding of the entity and its environment including internal control for the purposes of planning and conducting a review and that review procedures are ordinarily enquiries and analytical procedures rather than detailed tests (ASRE 2410, paras 13, 14; A19).
Recently appointed auditors and non-auditor reviewers: Paragraph 14 of ASRE 2410 as amended requires a recently appointed auditor who has not yet performed an audit of the annual financial report in accordance with Australian Auditing Standards to obtain an understanding of the entity and its environment and internal control as it relates to preparation of annual and interim reports. The explanatory paragraph A4 notes that a practitioner engaged to perform a review who is not the auditor "does not perform the review in accordance with ASRE 2410" because they ordinarily lack the same understanding as the entity’s auditor. That distinction affects practitioners who undertake reviews but are not the incumbent auditor; they cannot simply rely on ASRE 2410 as the methodology if they lack the baseline understanding (Amendments to ASRE 2410, para 14; A4).
Firms and their engagement teams: The amendments require implementation at the engagement level of firm policies or quality controlmanagement procedures. The explanatory paragraphs identify firm-level elements that translate to engagement management tasks: leadership responsibilities for quality, ethical requirements, client acceptance and continuance, team assignment and resources, engagement performance, monitoring and remediation (A6). Firms must therefore ensure operability of those procedures and their communication to engagement teams.
Entities subject to review/audit: Companies required to have audited or reviewed financial reports under the Corporations Act, companies limited by guarantee, entities reporting under the ACNC Act or other applicable legislation or regulation (the focus of ASRE 2415), and other reporting entities,have changes that may affect how reviews are conducted, particularly where auditors need fuller understanding of internal control relating to interim/other financial reports.
Standard-setters and regulators: The AUASB, the Financial Reporting Council (which gives Strategic Direction), and by implication ASIC, are affected as decision-makers and overseers. The instrument is made under AUASB statutory powers and described as a legislative instrument; the AUASB notes its obligation to have regard to IAASB programmes (Preface; Authority Statement).
Who pays: Firms bear direct compliance costs,training, updating policies and templates, possibly increased time on engagement planning and documentation. Entities may face higher audit/review fees if auditors spend additional time obtaining or updating entity understanding and implementing engagement-level quality procedures. Who decides: firms decide how to operationalise the quality controlmanagement procedures; AUASB decides the content of the standard; the FRC’s Strategic Direction and IAASB programmes shape AUASB priorities (Preface). Behavioural change: auditors will need to document and execute updated understanding procedures for both annual and interim reports and implement firm policies at engagement level; firms must translate ASQM/ASA changes into engagement-level practice.
Key duties and rights
The amending standard sets out a series of duties for auditors and firms, and clarifies the scope within which review engagements should be performed. The instrument does not create direct private rights or statutory entitlements beyond the standards’ normative force as legislative instruments; instead it specifies professional duties which then inform practice, regulatory expectations, and potentially enforcement by relevant authorities.
Principal duties established or clarified by the amendments
Implement applicable quality controlmanagement procedures at engagement level: Auditors are required to implement the firm’s policies or quality controlmanagement procedures that apply to the individual engagement. ASRE 2410 paragraph 9 is amended to read "The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement." ASRE 2415 paragraph 12 similarly requires implementation of the firm’s policies or quality control procedures applicable to the engagement. The explanatory material lists engagement-relevant elements such as leadership responsibilities, ethical requirements, client acceptance and continuance, assignment of teamsengagement resources, engagement performance, and monitoring and remediation (Amendments to ASRE 2410, paras 1; A6; Amendments to ASRE 2415, para 1).
Obtain and update understanding of the entity and its environment, and of internal control: Paragraph 13 of ASRE 2410 is amended to require auditors to obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of internal control as it relates to preparation of both annual and interim or other financial reports, sufficient to plan and conduct the engagement. Paragraph 14 adds a duty for recently appointed auditors who have not performed an audit of the annual financial report to obtain this understanding. The application material clarifies that when planning a review the auditor needs to update any existing understanding obtained in prior audits and to obtain sufficient understanding as it relates to the financial report subject to review, which may differ from controls relevant to annual reports (Amendments to ASRE 2410, paras 1-4; A4; A9).
Limitations on review procedures and their dependence on professional judgement: The amended standard reiterates that a review ordinarily does not require substantive tests of accounting records through inspection, observation, or confirmation; procedures are ordinarily limited to enquiries and analytical and other review procedures rather than corroborative testing. The auditor’s understanding of the entity, prior audit risk assessments, and materiality influence the nature and extent of enquiries and review procedures (A19).
Tailored planning and documentation: The material states the auditor needs to use their understanding to determine enquiries and analytical or other review procedures, and to identify events, transactions or assertions that require attention (A10-A11). The auditor is expected to update understanding through enquiries in the course of the review (A4; A11).
Rights and boundaries implicit in the text
Practitioner scope and standard applicability: The explanatory material A4 expressly states that a practitioner engaged to perform a review who is not the auditor does not ordinarily perform the review in accordance with ASRE 2410 because such a practitioner does not ordinarily have the same understanding as the auditor of the entity. That statement delineates the boundary of ASRE 2410’s application: users must be the entity’s auditor, or possess an equivalent level of understanding, to adopt ASRE 2410 processes as written (A4).
Reliance on firm-level resources and guidance: The amendments point auditors to ASQCM 1 and ASA 220 for guidance on quality controlmanagement matters, and to the AUASB Glossary for definitions. This constructs an implied right to rely on and refer to firm-level policies and established guidance when determining what procedures are "applicable to the individual engagement" (Amendments to Auditing Standards, paras 1-2; A6; footnotes).
Who decides at the operational level: Firms decide which of their firm-level policies and quality controlmanagement procedures are applicable to a particular engagement and how to allocate engagement resources; auditors decide, based on updated understanding and professional judgement, the enquiries and analytical or other review procedures to be applied (A6; A10).
Documentation and timing duties: The operative date requires application for reporting periods commencing on or after 15 December 2022. Firms and auditors must ensure duties are operational by that date, which creates an implementation timeline and associated compliance duties (Operative Date).
The standard is phrased as mandatory obligations for practising auditors under Australian Auditing Standards; it does not, in the text provided, specify statutory penalties for failure to comply but positions the duties within the legislative authority of the AUASB and the Corporations Act framework (Authority Statement; Preface).
Penalties and enforcement
The amending instrument sets out normative duties within Australian Auditing Standards but does not itself specify administrative penalties, criminal sanctions, or civil consequences for non-compliance within the text provided. What the text does provide about legal character and oversight informs the enforcement context.
Legislative instrument status and statutory basis: ASA 2022-2 is made by the AUASB pursuant to section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001. The AUASB describes itself as a non-corporate Commonwealth entity established under s 227A of the ASIC Act and notes the Auditing Standards are legislative instruments under the Legislation Act 2003 (Preface; Authority Statement). That legal framing means the standards have formal statutory recognition and are part of the regulatory architecture for financial reporting and audit quality in Australia. The text does not, however, set out enforcement mechanisms.
No penalties specified in the text: The amending standard’s text does not specify pecuniary fines, suspension mechanisms, professional discipline processes, or civil liability consequences for failing to comply with the amended obligations. The instrument also does not identify which regulator will enforce compliance or the procedures for enforcement. The absence of expressed sanctions in the instrument means that any enforcement, fines, or disciplinary measures would arise from the broader regulatory regime,statutory requirements under the Corporations Act, professional conduct rules, or regulator (for example, ASIC) practice,none of which are described in this document (Authority Statement; Application).
Implicit enforcement pathways: Although not specified in the instrument, the statutory footing (made under s 336 Corporations Act) suggests that the standards will inform regulator expectations and professional disciplinary processes. In practice, failure to comply with Auditing Standards can be relevant in regulatory investigations, civil claims, or professional disciplinary proceedings. The amending instrument itself does not create new enforcement powers; it alters professional obligations and guidance that regulators and professional bodies may use when assessing conduct.
Monitoring and remediation as quality elements: The explanatory material explicitly lists "monitoring and remediation" as one of the elements of quality controlmanagement relevant to an engagement (A6). That inclusion places a duty on firms to maintain mechanisms to detect deficiencies and take corrective action. The text suggests that monitoring and remediation are part of what firms should apply at the engagement level, but it does not describe mandatory monitoring regimes, required frequency, or reporting mechanisms.
Practical enforcement implications for firms: Because the standard amends engagement-level requirements,implement applicable firm policies or quality controlmanagement procedures; obtain appropriate entity understanding; update understanding and plan review procedures,firms will need to document implementation to demonstrate compliance. Absent explicit penalties in the text, the likely enforcement mechanism is evidential: regulators or professional bodies would examine whether engagement documentation and firm procedures comply with the amended standards when assessing complaints or conducting reviews.
In short, ASA 2022-2 establishes or clarifies professional duties within the Australian Auditing Standards framework and is a legislative instrument made under statutory authority. The text does not itself specify penalties or administrative enforcement mechanisms. Enforcement and sanctions, if any, should be inferred to follow from the wider legal and regulatory environment in which the AUASB standards operate, but the instrument does not describe those mechanisms.
How it interacts with other laws
ASA 2022-2 is positioned within a web of statutory and standard-setting instruments and explicitly interacts with both Australian legislation and international standard-setting outputs. The document ties AUASB authority, the Corporations Act, the ASIC Act, the Legislation Act, the Financial Reporting Council’s Strategic Direction, and several Australian and international auditing and quality management standards together.
Statutory foundation: The AUASB made the standard under section 227B of the Australian Securities and Investments Commission Act 2001 and section 336 of the Corporations Act 2001. The AUASB is itself established under s 227A of the ASIC Act. The instrument is described as a legislative instrument under the Legislation Act 2003 (Preface; Authority Statement). Those references place the amending standard within the statutory architecture governing auditing and corporate reporting in Australia.
Interaction with the Corporations Act regulated audits: The Application section confirms the standard applies to audits of financial reports for annual and half-year reporting under the Corporations Act 2001, and to audits of financial reports or complete sets of financial statements for other purposes, as well as, as appropriate, other historical financial information (Application). Therefore the amendments influence the conduct of audits and reviews that are legally required under the Corporations Act reporting regime.
Relationship with AUASB guidance and glossary: The instrument defers to the AUASB Glossary for definitions and directs users to existing standards for meaning,ASA 2022-2 does not introduce new definitions (Definition). This positions the amending text as an amendment to the suite of Australian Auditing Standards rather than a freestanding legal code.
Conformity with IAASB outputs and the FRC Strategic Direction: The AUASB explicitly says the amendments arise from consequential and conforming changes due to the IAASB’s issuance of ISQM 1, ISQM 2, ISA 220 (Revised), and ISA 315 (Revised), and notes the AUASB is required under the Financial Reporting Council’s Strategic Direction to have regard to IAASB programmes and make appropriate consequential amendments to Australian standards (Preface; Main Features). That creates a direct policy link between international standard revisions and Australian domestic standards.
Cross-references to Australian standards: The amendments directly alter ASRE 2410 and ASRE 2415 and reference ASQM 1, ASQM 2, ASA 220 and ASA 315. The amended text also refers auditors to ASQCM 1 and ASA 220 for guidance (Amendments to ASRE 2410, A6; footnotes). The changes are framed as conforming adjustments to bring review-focused standards into alignment with updated quality management and risk-assessment standards.
Interaction with professional regulation and potential enforcement: While ASA 2022-2 does not stipulate enforcement measures, its status as a legislative instrument and its connection to the Corporations Act mean that its content will inform regulatory and professional oversight. The standard’s requirements about implementing firm-level quality controlmanagement procedures and updating entity understanding have bearing on the expectations that regulators and professional bodies apply when they assess audit and review conduct. The instrument, however, does not define specific enforcement procedures.
Operational interactions for practitioners: The amended language distinguishing practitioners who are not the entity’s auditor (A4) interacts with professional practice choices. A non-auditor practitioner engaged to perform a review ordinarily will not have the auditor’s level of understanding, so the practitioner may need to determine which standard and procedures are appropriate for the engagement. The text therefore creates operational interactions between engagement selection, standard applicability, and firm competence.
Timing interaction with reporting periods: The operative date defines that the amendments apply to reporting periods commencing on or after 15 December 2022. That interacts with firms’ and auditors’ transition planning and affects which financial reporting cycles are governed by the amended provisions.
In sum, ASA 2022-2 operates as a statutory amendment to existing Australian Auditing Standards and explicitly interacts with the Corporations Act framework, AUASB guidance instruments, international IAASB revisions, and firm-level quality management procedures. It integrates domestic and international standard changes without creating new statutory offences or specifying enforcement processes in the text provided.
Amendment history
This amending instrument and the standards it changes have a discrete and traceable history as set out in the text. ASA 2022-2 itself is dated and issued by the AUASB and makes targeted changes to two existing Australian Review Engagement Standards.
ASA 2022-2 issuance and dates: The AUASB made ASA 2022-2 Amendments to Australian Auditing Standards on 13 December 2022, signed by W R Edge as Chair of the AUASB (Authority Statement). The operative date is specified: the instrument is operative for financial reporting periods commencing on or after 15 December 2022 (Operative Date).
Standards amended and their dates: ASA 2022-2 amends:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, which the document notes was issued on 9 June 2020 (Objective, para 1.1).
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation, which was issued on 30 June 2010 and amended to 5 November 2021 (Objective, para 1.2).
Scope of the amendments: The amending standard states its amendments are consequential and conforming, resulting from the issuance of new or revised quality management and auditing standards internationally and domestically,specifically ASQM 1, ASQM 2, ASA 220 (revised), and ASA 315 (revised). It aims to align ASRE 2410 and ASRE 2415 with these quality management and risk assessment revisions (Preface; Main Features; Introduction).
Nature of textual amendments: The instrument explains editorial practice used to show deletions and insertions for clarity,underlining and striking out are used in the instrument to indicate amendments, but the instrument clarifies that those editorial marks are not part of the final amended standards (Amendments to Auditing Standards, paras 1-2). The instrument then lists specific amended paragraphs in ASRE 2410 (para 9; paras 13-14; application paragraphs A4, A6, A9-A11, A19, A21) and ASRE 2415 (para 12 and footnote 5).
Specific amended provisions: Examples of the textual amendments include:
Para 9 of ASRE 2410: to require implementation of "quality controlmanagement procedures that are applicable to the individual engagement".
Para 13: to state the auditor must obtain an understanding of the entity and its environment and internal control as it relates to annual and interim or other financial reports.
Para 14: to require a recently appointed auditor who has not yet performed an audit of the annual financial report to obtain such understanding.
A6 and related footnote amendments to reference ASQCM 1 and ASA 220 as potentially helpful guidance.
Para 12 of ASRE 2415: to require implementation of firm policies or quality control procedures applicable to the engagement, and amending the associated footnote to reference ASA 220 (Amendments to ASRE 2410 & 2415).
No new definitions introduced: The instrument explicitly states that it does not introduce new definitions and defers to the AUASB Glossary and existing standards for term meanings (Definition).
Legislative character and conformity statement: The preface reiterates that these Auditing Standards are legislative instruments under the Legislation Act 2003. It also states there is no equivalent ISA for this Auditing Standard because it has been made for Australian legislative purposes (Conformity with International Standards on Auditing).
The amendment history in the document is narrowly focused: ASA 2022-2 is a specific, dated amending instrument that updates ASRE 2410 and 2415 to align with quality management and audit standard revisions. The instrument documents its own issuance date and operative date, cites the original issuance or last-amended dates of the affected standards, and sets out the exact paragraphs amended. It does not record prior litigation, transitional relief, or subsequent changes within this text.
Litigation history
The text supplied contains no judicial decisions, case names, or references to litigation about ASA 2022-2, ASRE 2410, ASRE 2415, or the AUASB’s authority. It names statutory provisions under which the AUASB operates (s 227A and 227B of the Australian Securities and Investments Commission Act 2001 and s 336 of the Corporations Act 2001), but it does not report any litigation interpreting those provisions or the standards themselves.
What the supplied material does show about the litigation context:
No cases cited or discussed: The document contains no case law citations, no summaries of legal challenges, and no references to judicial review or enforcement proceedings related to these amendments. The text confines itself to legislative authority, policy rationale, and the detailed textual amendments to ASRE 2410 and ASRE 2415.
Standards as part of regulatory fabric: While there is no litigation history recorded, the standards are framed as legislative instruments. In practice, legislative instruments and professional standards may become relevant in civil litigation (for example, professional negligence claims) or regulatory enforcement. The instrument itself does not describe or document any such instances.
Absence of transitional litigation matters: The instrument sets an operative date and lists amendments but does not provide transitional or grandfathering provisions where litigation might otherwise arise. It does not mention whether prior engagements or reports are to be re-examined or whether there are phased compliance measures.
Implication for future disputes: Because the amendment emphasises engagement-level implementation of firm quality controlmanagement procedures and requires updated understanding of internal control for reviews, future disputes could, in principle, involve whether those duties were met. The instrument does not canvass that risk. The absence of litigation history in the text means there is no source-grounded material to report on precedents or adjudicative interpretations of these specific amendments.
For practitioners, the practical consequence of the absence of litigation history in the instrument is that there is no court-authored guidance on how the amended wording will be interpreted in contentious contexts. Parties and regulators will need to rely on the plain text, the AUASB’s explanatory material, the referenced standards (ASQM 1, ASA 220, ASA 315), and any future regulatory guidance or case law that arises after the instrument’s operative date. The instrument’s text does not supply such guidance or historical litigation to cite.
Gotchas
The amended standard contains several drafting, operational, and transitional details that can generate practical traps if not addressed deliberately. The following are concrete risks and issues to watch for, as shown in the text supplied.
Terminology and formatting oddities: The amendments repeatedly use the concatenated term "quality controlmanagement" instead of a clearly separated "quality control" or "quality management." The explanatory paragraphs and footnotes also refer to "ASQCM 1" and variations in cross-referencing punctuation. These typographical or drafting inconsistencies could cause confusion when firms update their policy manuals and templates. Practitioners should not assume an unconditional substantive change in meaning without cross-referencing ASQM 1, ASA 220 and the AUASB Glossary, because the document itself states it does not introduce new definitions (Amendments to ASRE 2410; Definition).
Scope of applicability to reviews versus audits: Paragraph A4 explicitly states that a practitioner engaged to perform a review, and who is not the auditor of the entity, "does not perform the review in accordance with ASRE 2410" because they ordinarily do not have the same understanding as the auditor. That sentence is likely to be misread as prohibition on non-audit practitioners performing reviews; in reality it signals that such practitioners need to assess which standard properly governs their engagement. Failure to consider this distinction may lead to applying inappropriate procedures or failing to document the limits of the reviewer’s understanding (A4). Firms that accept review engagements while not being the incumbent auditor will need to decide which standards and procedures to apply and document why.
Recently appointed auditor duty: Paragraph 14 requires a recently appointed auditor who has not yet audited the annual financial report in accordance with Australian Auditing Standards to obtain an understanding of the entity and its internal control in relation to both annual and interim reports. This may be operationally burdensome where engagement windows are short,firms must not assume that prior limited knowledge suffices and must budget time to obtain that understanding before planning and conducting a review (Amendments to ASRE 2410, para 14).
Expanded internal control focus for interim/other reports: Paragraphs 13, A9 and related application material put greater emphasis on understanding the entity’s system of internal control as it relates specifically to the preparation of interim or other financial reports, noting that internal controls relevant to the reviewed financial report "may differ" from those relevant to the annual report. Auditors who rely on controls assessed for annual reports without reassessing control relevance for interim reporting risk misapplying the standard (Amendments to ASRE 2410, paras 13; A9).
Documentation expectations not spelled out: The standard requires auditors to obtain an understanding and to determine enquiries and analytical procedures, but the amending text does not set out documentary standards or specific files/records to be retained. Firms should not assume that minimal documentation will suffice. In the absence of explicit documentation rules, expect regulators or reviewers to examine whether the firm can demonstrate implementation of engagement-level quality procedures and updated entity understanding through workpapers and engagement files (Amendments to ASRE 2410, A10-A11; A6).
Reliance on other standards without precise mapping: The amending text refers users to ASQCM 1 and ASA 220 for guidance on elements of quality controlmanagement. However, the instrument does not provide a mapping of which ASQM/ASA provisions correspond to which ASRE obligations. Firms may therefore need to undertake their own mapping exercise to ensure consistent application across firm policy, ASA/ASRE expectations, and ISQM-related requirements (A6; footnotes).
Operative date nuance: The standard is operative for financial reporting periods commencing on or after 15 December 2022. That commencement date is by financial reporting period, not by the calendar date of engagement or practice changes. Firms must check reporting period start dates to determine whether an engagement falls within the amended standard's scope. Assuming a simple calendar date could lead to misapplication (Operative Date).
Lack of stated enforcement mechanisms: The instrument does not specify enforcement or penalty mechanisms for non-compliance (Penalties and enforcement). The practical implication is that enforcement is contextual and will depend on the broader regulatory and professional framework; firms should not rely on a lack of explicit penalties as a reason to deprioritise compliance.
Potential for substitution effects in practice: The amendments emphasise implementing firm policies at engagement level and obtaining expanded understanding for reviews. Firms seeking to control costs may reassign tasks to lower-cost staff, or shorten engagement planning, which could undermine quality. The standard does not define minimum resource levels; firms must exercise judgement and document decisions on resource allocation to withstand scrutiny (A6; para 13).
Repetition and redundancy across the instrument: The source text repeats sections and paragraphs in multiple places. This repetition may lead to inconsistent editing when firms update policies or checklists. Practitioners should rely on the operative text and the AUASB’s formal consolidated standards rather than draft or repeated versions provided in preliminary materials (Amendments to Auditing Standards, paras 1-2).
Each of these "gotchas" arises directly from the text of ASA 2022-2 as provided. Addressing them requires active decisions by firms: clarify terminology with reference to ASQM and AUASB Glossary; decide which standards govern reviews when the reviewer is not the entity’s auditor; budget time for recently appointed auditors to obtain requisite understanding; document procedures, mappings, and resource allocations; and apply the operative date correctly by reference to reporting periods.
How to comply
Complying with ASA 2022-2 requires a combination of policy updates at firm level, engagement-level planning and documentation changes, training of personnel, and transition planning tied to the operative date. The text supplies enough direction to outline concrete steps.
Identify affected engagements and timing: First, determine which engagements fall within the amending standard’s scope. ASA 2022-2 applies to audits of financial reports for financial years and half-years under the Corporations Act and to audits or reviews of financial reports or complete sets of financial statements for other purposes. It is operative for reporting periods commencing on or after 15 December 2022 (Application, Operative Date). Map your client portfolio by reporting period commencement to identify which audits and reviews must be carried out under the amended provisions.
Update firm-level policies and manuals: The amendments require auditors to implement "quality controlmanagement procedures that are applicable to the individual engagement" (ASRE 2410 para 9; ASRE 2415 para 12). Translate ASQM 1 and ASA 220 elements into firm policies and engagement checklists. The explanatory paragraph A6 lists elements to include at the engagement level: leadership responsibilities for quality, ethical requirements, client acceptance and continuance, assignment of engagement teamsengagement resources, engagement performance, and monitoring and remediation. Update or create templates for engagement acceptance, team assignment, supervision checklists, and monitoring procedures.
Train engagement teams on updated duties: Conduct training sessions explaining the amended requirements for obtaining an understanding of the entity and its environment, including internal control relevant to both annual and interim reports (ASRE 2410 paras 13-14; A9-A11). Explain the distinction in A4 that a practitioner who is not the entity’s auditor does not ordinarily perform a review in accordance with ASRE 2410 because they do not have the same baseline understanding. Ensure recently appointed auditors understand the specific duty to obtain understanding prior to planning and conducting a review.
Enhance planning procedures and documentation: Modify planning templates to capture the requirement that the auditor obtain and update understanding of the entity and its system of internal control as it relates to preparation of annual and interim or other financial reports (paras 13, 14). Use the understanding to determine enquiries and analytical and other review procedures and to identify specific events, transactions or assertions requiring enquiries (A10-A11). Ensure workpapers record the enquiries made, who was asked, the analytical procedures applied, and conclusions reached.
Address internal control relevance for interim reports: The amendments stress that internal control relevant to the financial report subject to review may differ from controls relevant to the annual report (A9). Implement a control‑mapping exercise to identify which controls operate over interim or other reporting processes, and document any differences. For entities where interim reporting relies on different systems or closing processes, design enquiries and analytical procedures accordingly.
Operationalise monitoring and remediation: The explanatory material includes monitoring and remediation as a quality element relevant to an engagement (A6). Establish or document engagement-level monitoring checkpoints, and define remediation procedures for identified deficiencies. Update engagement completion checklists to confirm that monitoring steps were performed and any remediation documented.
Decide standard applicability for non-incumbent practitioners: If your firm performs review engagements where it is not the entity’s auditor, do not assume ASRE 2410 applies without assessing whether your firm has the requisite understanding of the entity and its environment. If it does not, decide which standard(s) will govern and document the rationale and additional steps you will take to obtain sufficient understanding if necessary (A4).
Cross-reference to ASQM 1, ASQM 2, ASA 220 and ASA 315: The instrument directs auditors to consider ASQCM 1 and ASA 220 as potential guidance (A6; footnotes). Undertake a mapping exercise between your firm’s quality management policies and the firm-level requirements of ASQM 1 and ASA 220. Ensure engagement-level procedures are consistent with the firm’s quality management framework and document that consistency.
Update engagement resource allocation and budgeting: Because the amendments may increase planning and enquiry work,particularly for recently appointed auditors and for updated internal control examinations,revisit engagement budgets and assignment of team members. Ensure that engagement resources reflect the time required to implement applicable firm policies and to update entity understanding.
Record transition decisions and governance oversight: The operative date is by reporting period commencement. Document the transition plan, the date of application for each engagement, and governance oversight by senior leadership for firm-wide implementation. The instrument emphasises leadership responsibilities for managing and achieving quality on the engagement; accordingly firms should record who in leadership is accountable for implementation and monitoring (A6).
Quality reviews and internal assessments: Use internal inspections or engagement quality reviews, where applicable, to check whether the amended requirements are being applied. ASRE 2415 footnote amendments point to ASA 220 for guidance on reviewing quality controlmanagement procedures appropriate to a review engagement (Amendments to ASRE 2415, para 1).
Keep up-to-date consolidated standards: Because the amending instrument uses underlining and strike-through solely for expositional purposes and not as part of the final amended standards, ensure that staff work from the consolidated, authoritative AUASB texts and the AUASB Glossary rather than draft or marked-up copies. The amending standard warns that underlining/striking is not included in the final standard (Amendments to Auditing Standards, paras 1-2).
Practical checklist (derived from the text)
Map client reporting period start dates to the operative date (15 Dec 2022).
Update firm quality manuals to incorporate ASQM/ASA changes and create engagement-level checklists.
Train auditors and newly appointed auditors on the updated entity understanding duties.
Update planning and workpaper templates to capture enquiries, analytical procedures, and control mappings specific to interim and other reports.
Review engagement acceptance procedures to reflect the need for sufficient understanding and applicable firm policies.
Document leadership responsibilities for quality, monitoring checkpoints, and remediation actions.
Maintain clear records of where a practitioner is not the incumbent auditor and the standard chosen for the engagement.
Following these concrete steps, grounded in the instrument’s text, will place firms in a position to demonstrate implementation of the amended requirements should they be examined by regulators or subject to professional scrutiny.
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............................................7-8
Amendments to ASRE 2410...................................................9-19
Amendments to ASRE 2415..................................................20-21
preface
Reasons for Issuing ASA 2022-2
The AUASB issues Auditing Standard ASA 2022-2 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 & other explanatory material of the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
The amendments arise from changes made by the International Auditing and Assurance Standards Board (IAASB) to ISQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, ISQM 2 Engagement Quality Reviews, ISA 220 (Revised) Quality Management for an Audit of Financial Statements and ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement. Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required to have regard to any programme initiated by the IAASB for the revision and enhancement of the International Standards on Auditing (ISAs) and to make appropriate consequential amendments to the Australian Auditing Standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2022-2 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: 13 December 2022 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 2022-2 Reasons for Issuing ASA 2022-2
Reasons for Issuing ASA 2022-2
The AUASB issues Auditing Standard ASA 2022-2 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 & other explanatory material of the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
The amendments arise from changes made by the International Auditing and Assurance Standards Board (IAASB) to ISQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, ISQM 2 Engagement Quality Reviews, ISA 220 (Revised) Quality Management for an Audit of Financial Statements and ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement. Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required to have regard to any programme initiated by the IAASB for the revision and enhancement of the International Standards on Auditing (ISAs) and to make appropriate consequential amendments to the Australian Auditing Standards.
AUTHORITY STATEMENT
The Auditing and Assurance Standards Board (AUASB) makes this Auditing Standard ASA 2022-2 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: 13 December 2022 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 2022-2 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 2022-2 Auditing Standard ASA 2022-2
Auditing Standard ASA 2022-2
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 15 December 2022.
Introduction
Scope of this Auditing Standard
This Auditing Standard makes amendments to Australian Auditing Standards. The amendments arise from consequential and conforming changes arising from the issuance of ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements, ASQM 2 Engagement Quality Reviews, ASA 220 Quality Management for an Audit of a Financial Report and Other Historical Financial Information and ASA 315 Identifying and Assessing the Risks of Material Misstatement.
Objective
The objective of this Auditing Standard is to make amendments to the following Auditing Standards:
ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (Issued 9 June 2020)
ASRE 2415 Review of a Financial Report: Company Limited by Guarantee or an Entity Reporting under the ACNC Act or Other Applicable Legislation or Regulation (Issued 30 June 2010 and amended to 5 November 2021)
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
Where relevant, this Standard uses underlining, striking out and other typographical material to identify 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.
Where this amending standard inserts or deletes a paragraph or footnote, as a result of that insertion or deletion relevant paragraph numbers, cross-references and footnotes are updated.
Amendments to ASRE 2410
Existing paragraph 9 is amended to read as follows:
The auditor shall implement quality controlmanagement procedures that are applicable to the individual engagement.
Existing paragraph 13 is amended to read as follows:
The auditor shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports, sufficient to plan and conduct the engagement so as to be able to:
…
Existing paragraph 14 is amended to read as follows:
In order to plan and conduct a review of a financial report, a recently appointed auditor, who has not yet performed an audit of the annual financial report in accordance with Australian Auditing Standards, shall obtain an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control, as it relates to the preparation of both the annual and interim or other financial reports.
Existing paragraph A4 is amended to read as follows:
Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity’s system of including its internal control. When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the
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