Document ID: chunk:federal_register_of_legislation:F2023C01125:body:0:p16
Version: federal_register_of_legislation:F2023C01125
Segment Type: other
Provision Reference: 
Character Range: 44649–47879

involvement of management and, where applicable, those charged with governance, in any identified or suspected non‑compliance.

           * The auditor is aware that management and, where applicable, those charged with governance. have knowledge of such non‑compliance and, contrary to legal or regulatory requirements, have not reported, or authorised reporting of, the matter to an appropriate authority within a reasonable period.

A25.         In certain circumstances, the auditor may consider withdrawing from the engagement, where permitted by law or regulation, for example when management or those charged with governance do not take the remedial action that the auditor considers appropriate in the circumstances or the identified or suspected non‑compliance raises questions regarding the integrity of management or those charged with governance, even when the non‑compliance is not material to the financial report.  The auditor may consider it appropriate to obtain legal advice to determine whether withdrawal from the engagement is appropriate.  When the auditor determines that withdrawing from the engagement would be appropriate, doing so would not be a substitute for complying with other responsibilities under law, regulation or relevant ethical requirements to respond to identified or suspected non‑compliance.  Furthermore, paragraph A55 of ASA 220[14] indicates that some ethical requirements may require the predecessor auditor, upon request by the proposed successor auditor, to provide information regarding non‑compliance with laws and regulations to the successor auditor.

Communicating and Reporting Identified or Suspected Non‑Compliance

Potential Implications of Identified or Suspected Non‑Compliance for the Auditor's Report (Ref: Para. 26–28)

A26.         Identified or suspected non‑compliance with laws and regulation is communicated in the auditor's report when the auditor modifies the opinion in accordance with paragraphs 26–28.  In certain other circumstances, the auditor may communicate identified or suspected non‑compliance in the auditor's report, for example:

         * When the auditor has other reporting responsibilities, in addition to the auditor's responsibilities under the Australian Auditing Standards, as contemplated by paragraph 43 of ASA 700;

         * When the auditor determines that the identified or suspected non‑compliance is a key audit matter and accordingly communicates the matter in accordance with ASA 701,[15] unless paragraph 14 of that Auditing Standard applies; or

         * In exceptional cases when management or those charged with governance do not take the remedial action that the auditor considers appropriate in the circumstances and withdrawal from the engagement is not possible (see paragraph A25), the auditor may consider describing the identified or suspected non‑compliance in an Other Matter paragraph in accordance with ASA 706.[16]

Aus A26.1 If, in the case of an audit conducted under the Corporations Act 2001, the auditor identifies non‑compliance with an Australian Accounting Standard, defects or irregularities in the financial report or deficiencies, failures or shortcomings in respect of section 307 of the Act, the