Document ID: chunk:federal_register_of_legislation:F2023C01136:reg:9:p9
Version: federal_register_of_legislation:F2023C01136
Segment Type: reg
Provision Reference: reg 9 (pt 9/24)
Character Range: 28648–31836

designing further audit procedures, the auditor is required to obtain more persuasive audit evidence the higher the auditor's assessment of risk.[16]  When obtaining more persuasive audit evidence because of a higher assessment of risk, the auditor may increase the quantity of the evidence, or obtain evidence that is more relevant or reliable, for example, by placing more emphasis on obtaining third party evidence or by obtaining corroborating evidence from a number of independent sources.[17]

A13.         Accordingly, matters that pose challenges to the auditor in obtaining sufficient appropriate audit evidence or pose challenges to the auditor in forming an opinion on the financial report may be particularly relevant in the auditor's determination of key audit matters.

A14.         Areas of significant auditor attention often relate to areas of complexity and significant management judgement in the financial report, and therefore often involve difficult or complex auditor judgements.  In turn, this often affects the auditor's overall audit strategy, the allocation of resources and extent of audit effort in relation to such matters.  These effects may include, for example, the extent of involvement of senior personnel on the audit engagement or the involvement of an auditor's expert or individuals with expertise in a specialised area of accounting or auditing, whether engaged or employed by the firm to address these areas.

A15.         Various Australian Auditing Standards require specific communications with those charged with governance and others that may relate to areas of significant auditor attention.  For example:

           * ASA 260 requires the auditor to communicate significant difficulties, if any, encountered during the audit with those charged with governance.[18]  The Australian Auditing Standards acknowledge potential difficulties in relation to, for example:

                   + Related party transactions,[19] in particular limitations on the auditor's ability to obtain audit evidence that all other aspects of a related party transaction (other than price) are equivalent to those of a similar arm's length transaction.

                   + Limitations on the group audit, for example, where access to information or people may have been restricted.[20]

           * ASA 220 establishes requirements for the engagement partner in relation to undertaking appropriate consultation on difficult or contentious matters, matters on which the firm's policies or procedures require consultation,[21] and other matters that in the engagement partner's professional judgement, require consultation. For example, the auditor may have consulted with others within the firm or outside the firm on a significant technical matter, which may be an indicator that it is a key audit matter.  The engagement partner is also required to discuss, among other things, significant matters and significant judgements arising during the audit engagement with the engagement quality reviewer.[22]

Considerations in Determining Those Matters that Required Significant Auditor Attention (Ref: Para. 9)

A16.         The auditor may develop a preliminary