Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p20
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 20/57)
Character Range: 64483–67840

require tests of the accounting records through inspection, observation or confirmation.  Procedures for performing a review of a financial report ordinarily are limited to making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures, rather than corroborating information obtained concerning matters relating to the financial report.  The auditor's understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of internal control, the results of the risk assessments relating to the preceding audit and the auditor's consideration of materiality as it relates to the financial report, affects the nature and extent of the enquiries made, and analytical and other review procedures applied.  (Ref: Para. 16)

A20.         The auditor ordinarily performs the following procedures:

(a)                Reading the minutes of the meetings of shareholders, those charged with governance and other appropriate committees to identify matters that may affect the financial report, and enquiring about matters dealt with at meetings for which minutes are not available that may affect the financial report.

(b)                Considering the effect, if any, of matters giving rise to a modification of the audit or auditor's review report, accounting adjustments or unadjusted misstatements, at the time of the previous audit or reviews.

(c)                Communicating, where appropriate, with other auditors who are performing a review of the financial report of the entity's significant components.

         (d)                Enquiring of members of management responsible for financial and accounting matters, and others as appropriate, about the following:

(i)                 whether the financial report has been prepared and presented in accordance with the applicable financial reporting framework;

(ii)               whether there have been any changes in accounting principles or in the methods of applying them;

(iii)             whether any new transactions have necessitated the application of a new accounting principle;

(iv)             whether the financial report contains any known uncorrected misstatements;

(v)                unusual or complex situations that may have affected the financial report, such as a business combination or disposal of a segment of the business;

(vi)             significant assumptions that are relevant to the fair value measurement or disclosures and management's intention and ability to carry out specific courses of action on behalf of the entity;

(vii)           whether related party transactions have been appropriately accounted for and disclosed in the financial report;

(viii)         significant changes in commitments and contractual obligations;

(ix)             significant changes in contingent assets and contingent liabilities including litigation or claims;

(x)                compliance with debt covenants;

(xi)             matters about which questions have arisen in the course of applying the review procedures;

(xii)           significant transactions occurring in the last several days of the period or the first several days of the next period;

(xiii)         knowledge of any fraud or suspected fraud affecting the entity involving: