Document ID: chunk:federal_register_of_legislation:F2023C01128:reg:17:p4
Version: federal_register_of_legislation:F2023C01128
Segment Type: reg
Provision Reference: reg 17 (pt 4/25)
Character Range: 16332–19565

with governance.  Law or regulation may specifically prohibit a communication, or other action, that might prejudice an investigation by an appropriate authority into an actual, or suspected, illegal act, including alerting the entity, for example, when the auditor is required to report identified or suspected non-compliance with laws or regulations to an appropriate authority pursuant to anti-money laundering legislation.  In these circumstances, the issues considered by the auditor may be complex and the auditor may consider it appropriate to obtain legal advice.

Effective Date

8.                   [Deleted by the AUASB.  Refer Aus 0.3]

Objectives

9.                   The objectives of the auditor are:

(a)                To communicate clearly with those charged with governance the responsibilities of the auditor in relation to the financial report audit, and an overview of the planned scope and timing of the audit;

(b)                To obtain from those charged with governance information relevant to the audit;

(c)                To provide those charged with governance with timely observations arising from the audit that are significant and relevant to their responsibility to oversee the financial reporting process; and

(d)                To promote effective two‑way communication between the auditor and those charged with governance.

Definitions

10.               For the purposes of this Auditing Standard, the following terms have the meanings attributed below:

(a)                Those charged with governance – The person(s) or organisation(s) (e.g., a corporate trustee) with responsibility for overseeing the strategic direction of the entity and obligations related to the accountability of the entity.  This includes overseeing the financial reporting process.  For some entities in some jurisdictions, those charged with governance may include management personnel, for example, executive members of a governance board of a private or public sector entity, or an owner‑manager.  For discussion of the diversity of governance structures, see paragraphs A1–A8 of this Auditing Standard.

(b)                Management – The person(s) with executive responsibility for the conduct of the entity's operations.  For some entities in some jurisdictions, management includes some or all of those charged with governance, for example, executive members of a governance board, or an owner‑manager.

Requirements

Those Charged with Governance

11.               The auditor shall determine the appropriate person(s) within the entity's governance structure with whom to communicate.  (Ref: Para. A1–A4)

Communication with a Subgroup of Those Charged with Governance

12.               If the auditor communicates with a subgroup of those charged with governance, for example, an audit committee, or an individual, the auditor shall determine whether the auditor also needs to communicate with the governing body.  (Ref: Para. A5–A7)

When All of Those Charged with Governance Are Involved in Managing the Entity

13.               In some cases, all of those charged with governance are involved in managing the entity, for example, a small business where a single owner manages the entity and