Document ID: chunk:federal_register_of_legislation:F2023C01124:reg:17:p14
Version: federal_register_of_legislation:F2023C01124
Segment Type: reg
Provision Reference: reg 17 (pt 14/41)
Character Range: 50038–53195

Board requires the auditor to take steps to respond to identified or suspected non‑compliance with laws and regulations and determine whether further action is needed. Such steps may include the communication of identified or suspected non‑compliance with laws and regulations between auditors within the engagement team or other auditors performing work at entities or business units of a group for purposes other than the audit of the group financial report. [15]

Considerations Specific to Public Sector Entities

A7.             The public sector auditor's responsibilities relating to fraud may be a result of law, regulation or other authority, applicable to public sector entities or separately covered by the auditor's mandate.  Consequently, the public sector auditor's responsibilities may not be limited to consideration of risks of material misstatement of the financial report, but may also include a broader responsibility to consider risks of fraud.

Professional Scepticism (Ref: Para. 13‑15)

A8.             Maintaining professional scepticism requires an ongoing questioning of whether the information and audit evidence obtained suggests that a material misstatement due to fraud may exist.  It includes considering the reliability of the information to be used as audit evidence and identified controls in the control activities component, if any, over its preparation and maintenance.  Due to the characteristics of fraud, the auditor's professional scepticism is particularly important when considering the risks of material misstatement due to fraud.

A9.             Although the auditor cannot be expected to disregard past experience of the honesty and integrity of the entity's management and those charged with governance, the auditor's professional scepticism is particularly important in considering the risks of material misstatement due to fraud because there may have been changes in circumstances.

A10.         An audit performed in accordance with Australian Auditing Standards rarely involves the authentication of documents, nor is the auditor trained as or expected to be an expert in such authentication.[16]  However, when the auditor identifies conditions that cause the auditor to believe that a document may not be authentic or that terms in a document have been modified but not disclosed to the auditor, possible procedures to investigate further may include:

           * Confirming directly with the third party.

           * Using the work of an expert to assess the document's authenticity.

Discussion among the Engagement Team (Ref: Para. 16)

A11.         Discussing the susceptibility of the entity's financial report to material misstatement due to fraud with the engagement team:

           * Provides an opportunity for more experienced engagement team members to share their insights about how and where the financial report may be susceptible to material misstatement due to fraud.

           * Enables the auditor to consider an appropriate response to such susceptibility and to determine which members of the engagement team will conduct certain audit procedures.

           * Permits