Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p44
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 44/57)
Character Range: 131883–134975

a material effect on the financial report under review and, in particular, enquire whether:

      1. any substantial commitments or uncertainties have arisen subsequent to the balance sheet date;

      2. any significant changes in the share capital, long‑term debt or working capital have occurred up to the date of enquiry; and

      3. any unusual adjustments have been made during the period between the balance sheet reporting date and the date of enquiry.

  Consider the need for adjustments or disclosure in the financial report.

  82.   Obtain and read the minutes of meetings of shareholders, those charged with governance and appropriate committees subsequent to the balance sheet date and consider any impact of the financial report and disclosures.

Litigation

  83.   Enquire from persons responsible for financial reporting, and where appropriate in‑house litigation specialists, whether the entity is the subject of any legal actions - threatened, pending or in process.  Consider the effect thereof on the financial report and any provision for loss.

Equity

  84.   Obtain and consider a schedule of the transactions in the equity accounts, including new issues, retirements and dividends.  Consider whether there are any unusual terms for new issues of debt or equity which could affect classification.

  85.   Enquire whether there are any restrictions on retained earnings or other equity accounts.

Operations

  86.   Compare results with those of prior periods and those expected for the current period.  Obtain explanations of significant variations with management.

  87.   Enquire whether the recognition of major revenue and expenses have taken place in the appropriate periods.

  88.   Enquire whether the policies and procedures related to revenue recognition, including accrued income, have been consistently applied and whether there are any new or complex changes, including any changes in major contracts with customers or suppliers.

  89.   Consider and update with management the relationship between related items in the revenue account and assess the reasonableness thereof in the context of similar relationships for prior periods and other information available to the auditor.

  90.   Discuss the policy in respect of capitalisation of interest and whether it is in accordance with Australian Accounting Standards.

Going Concern Assessment

  91.   Consider the going concern assumption.  When events or conditions come to attention which may cast significant doubt on the entity's ability to continue as a going concern, perform additional procedures to assess the impact on the financial report and auditor's review report as required by paragraph 19 of this Auditing Standard.  Additional procedures include:

      1. Discussion with those charged with governance to understand the events and circumstances that have contributed to the current situation to determine whether the risk arising can be mitigated.

      2. Plans for future actions, such as plans or intentions to liquidate assets, borrow money or restructure debt, reduce