Document ID: chunk:federal_register_of_legislation:F2022C01186:reg:14:p10
Version: federal_register_of_legislation:F2022C01186
Segment Type: reg
Provision Reference: reg 14 (pt 10/30)
Character Range: 39849–43098

(i)                 The circumstances surrounding the inability to comply;

(ii)               The reasons for the inability to comply; and

                  (iii)             Justification of how alternative audit procedures achieve the objectives of the  requirement.

         When the auditor is unable to perform the appropriate alternative audit procedures, the auditor shall consider the requirement in paragraph 24 of this Auditing Standard.  (Ref: Para. A81‑Aus A81.1)

Failure to Achieve an Objective

24.               If an objective in a relevant Auditing Standard cannot be achieved, the auditor shall evaluate whether this prevents the auditor from achieving the overall objectives of the auditor and thereby requires the auditor, in accordance with Australian Auditing Standards, to modify the auditor's opinion or withdraw from the engagement (where withdrawal is possible under applicable law or regulation).  Failure to achieve an objective represents a significant matter requiring documentation in accordance with ASA 230.[4]  (Ref: Para. A82‑A83)

* * *

Application and Other Explanatory Material

Definitions

Financial statements (Ref: Para. 13(f))

A1.             Some financial reporting frameworks may refer to an entity's economic resources or obligations in other terms.  For example, these may be referred to as the entity's assets and liabilities, and the residual difference between them may be referred to as equity or equity interests.

A2.             Explanatory or descriptive information required to be included in the financial statements by the applicable financial reporting framework may be incorporated therein by cross‑reference to information in another document, such as a management report or a risk report.  "Incorporated therein by cross‑reference" means cross‑referenced from the financial statements to the other document, but not from the other document to the financial statements.  Where the applicable financial reporting framework does not expressly prohibit the cross‑referencing of where explanatory or descriptive information may be found, and the information has been appropriately cross‑referenced, the information will form part of the financial statements.

Risk of Material Misstatement (Ref: Para. 13(n))

A3.             For the purposes of the Australian Auditing Standards, a risk of material misstatement exists when there is a reasonable possibility of:

(a)                A misstatement occurring (i.e., its likelihood); and

(b)                Being material if it were to occur (i.e., its magnitude).

An Audit of a Financial Report

Scope of the Audit (Ref: Para. 3)

A4.             The auditor's opinion on the financial report deals with whether the financial report is prepared, in all material respects, in accordance with the applicable financial reporting framework.  Such an opinion is common to all audits of financial reports.  The auditor's opinion therefore does not assure, for example, the future viability of the entity nor the efficiency or effectiveness with which management has conducted the affairs of the entity.  In some jurisdictions, however, applicable law or regulation may require auditors to provide opinions on other specific matters, such