Document ID: chunk:federal_register_of_legislation:F2023C00337:reg:1:p15
Version: federal_register_of_legislation:F2023C00337
Segment Type: reg
Provision Reference: reg 1 (pt 15/23)
Character Range: 49084–52065

for the auditor to change the terms of the audit engagement may result from a change in circumstances affecting the need for the service, a misunderstanding as to the nature of an audit as originally requested or a restriction on the scope of the audit engagement, whether imposed by management or caused by other circumstances.  The auditor, as required by paragraph 14, considers the justification given for the request, particularly the implications of a restriction on the scope of the audit engagement.

A32.         A change in circumstances that affects the entity's requirements or a misunderstanding concerning the nature of the service originally requested may be considered a reasonable basis for requesting a change in the audit engagement.

A33.         In contrast, a change may not be considered reasonable if it appears that the change relates to information that is incorrect, incomplete or otherwise unsatisfactory.  An example might be where the auditor is unable to obtain sufficient appropriate audit evidence regarding receivables and the entity asks for the audit engagement to be changed to a review engagement to avoid a qualified opinion or a disclaimer of opinion.

Request to Change to a Review or a Related Service (Ref: Para. 15)

A34.         Before agreeing to change an audit engagement to a review or a related service, an auditor who was engaged to perform an audit in accordance with Australian Auditing Standards may need to assess, in addition to the matters referred to in paragraphs A31‑A33 above, any legal or contractual implications of the change.

A35.         If the auditor concludes that there is reasonable justification to change the audit engagement to a review or a related service, the audit work performed to the date of change may be relevant to the changed engagement; however, the work required to be performed and the report to be issued would be those appropriate to the revised engagement.  In order to avoid confusing the reader, the report on the related service would not include reference to:

(a)                The original audit engagement; or

(b)                Any procedures that may have been performed in the original audit engagement, except where the audit engagement is changed to an engagement to undertake agreed‑upon procedures and thus reference to the procedures performed is a normal part of the report.

Additional Considerations in Engagement Acceptance

Financial Reporting Standards Supplemented by Law or Regulation (Ref: Para. 18)

A36.         In some jurisdictions, law or regulation may supplement the financial reporting standards established by an authorised or recognised standards setting organisation with additional requirements relating to the preparation of the financial report.  In those jurisdictions, the applicable financial reporting framework for the purposes of applying the Australian Auditing Standards encompasses both the identified financial reporting framework and such