Document ID: chunk:federal_register_of_legislation:F2023C01119:body:0:p25
Version: federal_register_of_legislation:F2023C01119
Segment Type: other
Provision Reference: 
Character Range: 70891–74106

are to be dealt with. For example, the APESB Code explains that a self-interest threat to compliance with the fundamental principle of professional competence and due care may arise if the fee quoted for an audit engagement is so low that it might be difficult to perform the engagement in accordance with Australian Auditing Standards.[29]

Breaches of Relevant Ethical Requirements (Ref: Para. 19)

A46.         In accordance with ASQM 1, the firm is required to establish policies or procedures for identifying, communicating, evaluating and reporting of any breaches of relevant ethical requirements and appropriately responding to the causes and consequences of the breaches in a timely manner.

Taking Appropriate Action (Ref: Para. 20)

A47.         Appropriate actions may include, for example:

           * Following the firm's policies or procedures regarding breaches of relevant ethical requirements, including communicating to or consulting with the appropriate individuals so that appropriate action can be taken, including as applicable, disciplinary action(s).

           * Communicating with those charged with governance.

           * Communicating with regulatory authorities or professional bodies. In some circumstances, communication with regulatory authorities may be required by law or regulation.

           * Seeking legal advice.

           * Withdrawing from the audit engagement, when withdrawal is possible under applicable law or regulation.

Prior to Dating the Auditor's Report (Ref: Para. 21)

A48.         ASA 700 requires that the auditor's report include a statement that the auditor is independent of the entity in accordance with the relevant ethical requirements relating to the audit, and that the auditor has fulfilled the auditor's other ethical responsibilities in accordance with these requirements.[30] Performing the procedures required by paragraphs 16–21 of this ASA provides the basis for these statements in the auditor's report.

Considerations Specific to Public Sector Entities

A49.         Statutory measures may provide safeguards for the independence of public sector auditors. However, public sector auditors or audit firms carrying out public sector audits on behalf of the statutory auditor may, depending on the terms of the mandate in a particular jurisdiction, need to adapt their approach to promote compliance with paragraph 16. This may include, where the public sector auditor's mandate does not permit withdrawal from the audit engagement, disclosure through a public report of circumstances that have arisen that would, if they were in the private sector, lead the auditor to withdraw.

Acceptance and Continuance of Client Relationships and Audit Engagements (Ref: Para. 22–24)

A50.         ASQM 1 requires the firm to establish quality objectives that address the acceptance and continuance of client relationships and specific engagements.

A51.         Information such as the following may assist the engagement partner in determining whether the conclusions reached regarding the acceptance and continuance of client relationships and audit engagements are appropriate:

           * The integrity and ethical values of the principal