Amendments to ASA 701Amendments to ASA 701

Amendments to ASA 701

1. Existing paragraph 4 is amended to read as follows:

Communicating key audit matters in the auditor’s report is in the context of the auditor having formed an opinion on the financial report as a whole. Communicating key audit matters in the auditor’s report is not:

1. A substitute for disclosures in the financial report that the applicable financial reporting framework requires management to make, or that are otherwise necessary to achieve fair presentation;

2. A substitute for the auditor expressing a modified opinion when required by the circumstances of a specific audit engagement in accordance with ASA 705;1

3. A substitute for reporting in accordance with ASA 5702 when a material uncertainty exists relating to events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern; or

4. A separate opinion on individual matters. (Ref: Para. A5–A8)

5. Existing footnote 2 in paragraph 4 is amended to read as follows:

See ASA 570 Going Concern, paragraphs 34-3822–23.

1. Existing paragraph 15 is amended to read as follows:

The following are, by their nature, key audit matters: aA matter giving rise to a modified opinion in accordance with ASA 705 or, in accordance with ASA 570, or a material uncertainty related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern or when significant judgements were made by management in concluding that there is no material uncertainty.in accordance with ASA 570, are by their nature key audit matters. However, in such circumstances, these matters shall not be described in the Key Audit Matters section of the auditor’s report and the requirements in paragraphs 13–14 of this Auditing Standard do not apply. Rather, the auditor shall:

1. Report on these matter(s) in accordance with the applicable Australian Auditing Standards; and

2. Include a reference to the Basis for Qualified (Adverse) Opinion, or the Material Uncertainty Related to Going Concern or the Going Concern section(s) in the Key Audit Matters section. (Ref: Para. A6–A7)

3. Existing paragraph A41 is amended to read as follows:

In addition to referring to related disclosure(s), the auditor may draw attention to key aspects of them. The extent of disclosure by management about specific aspects or factors in relation to how a particular matter is affecting the financial report of the current period may help the auditor in pinpointing particular aspects of how the matter was addressed in the audit such that intended users can understand why the matter is a key audit matter. For example: