Document ID: chunk:federal_register_of_legislation:F2023C01136:reg:9:p2
Version: federal_register_of_legislation:F2023C01136
Segment Type: reg
Provision Reference: reg 9 (pt 2/24)
Character Range: 9391–12377

made by the AUASB up to and including 27 April 2022 (see Compilation Details).

Auditing Standard ASA 701

Communicating Key Audit Matters in the Independent Auditor's Report

Application

Aus 0.1 This Auditing Standard applies to:

(a) an audit of a financial report for a financial year, or an audit of a financial report for a half‑year, in accordance with the Corporations Act 2001; and

(b) an audit of a financial report, or a complete set of financial statements, for any other purpose.

Aus 0.2 This Auditing Standard also applies, as appropriate, to an audit of other historical financial information.

Operative Date

Aus 0.3 This Auditing Standard is operative for financial reporting periods ending on or after 15 December 2016.  [Note: For operative dates of paragraphs changed or added by an Amending Standard, see Compilation Details.]

Introduction

Scope of this Auditing Standard

      1. This Auditing Standard deals with the auditor's responsibility to communicate key audit matters in the auditor's report.  It is intended to address both the auditor's judgement as to what to communicate in the auditor's report and the form and content of such communication.

      2. The purpose of communicating key audit matters is to enhance the communicative value of the auditor's report by providing greater transparency about the audit that was performed.  Communicating key audit matters provides additional information to intended users of the financial report ("intended users") to assist them in understanding those matters that, in the auditor's professional judgement, were of most significance in the audit of the financial report of the current period.  Communicating key audit matters may also assist intended users in understanding the entity and areas of significant management judgement in the audited financial report.  (Ref: Para. A1–A4)

      3. The communication of key audit matters in the auditor's report may also provide intended users a basis to further engage with management and those charged with governance about certain matters relating to the entity, the audited financial report, or the audit that was performed.

      4. Communicating key audit matters in the auditor's report is in the context of the auditor having formed an opinion on the financial report as a whole.  Communicating key audit matters in the auditor's report is not:

(a)                A substitute for disclosures in the financial report that the applicable financial reporting framework requires management to make, or that are otherwise necessary to achieve fair presentation;

(b)                A substitute for the auditor expressing a modified opinion when required by the circumstances of a specific audit engagement in accordance with ASA 705;[1]

(c)                A substitute for reporting in accordance with ASA 570[2] when a material uncertainty exists relating to events or conditions that may cast significant doubt on an entity's ability to continue