Document ID: chunk:federal_register_of_legislation:F2023C00337:reg:1:p11
Version: federal_register_of_legislation:F2023C00337
Segment Type: reg
Provision Reference: reg 1 (pt 11/23)
Character Range: 38147–41091

jurisdictions, law or regulation may refer to the responsibility of management for the adequacy of accounting books and records, or accounting systems.  In some cases, general practice may assume a distinction between accounting books and records or accounting systems on the one hand, and internal control or controls on the other.  As accounting books and records, or accounting systems, are an integral part of internal control as referred to in paragraph A18, no specific reference is made to them in paragraph 6(b)(ii) for the description of the responsibility of management.  To avoid misunderstanding, it may be appropriate for the auditor to explain to management the scope of this responsibility.

Additional Information (Ref: Para 6(b)(iii)b)

A20.         Additional information that the auditor may request from management for the purpose of the audit may include when applicable, matters related to other information in accordance with ASA 720.  When the auditor expects to obtain other information after the date of the auditor's report, the terms of the audit engagement may also acknowledge the auditor's responsibilities relating to such other information including, if applicable, the actions that may be appropriate or necessary if the auditor concludes that a material misstatement of the other information exists in other information obtained after the date of the auditor's report.

Considerations Relevant to Smaller Entities (Ref: Para. 6(b))

A21.         One of the purposes of agreeing the terms of the audit engagement is to avoid misunderstanding about the respective responsibilities of management and the auditor.  For example, when a third party has assisted with the preparation of the financial report, it may be useful to remind management that the preparation of the financial report in accordance with the applicable financial reporting framework remains its responsibility.

Management‑Imposed Limitation of Scope (Ref: Para. 6(b))

Aus A21.1 Section 312 of the Corporations Act 2001 (the Act) requires an officer of the entity to allow the auditor access to the books of the entity and give any information, explanation or assistance required under section 310 of the Act.  A management‑imposed restriction of scope may breach section 312 and trigger the need for a section 311 notice to be provided by the auditor to the Australian Securities and Investments Commission (ASIC).

Agreement on Audit Engagement Terms

Agreeing the Terms of the Audit Engagement (Ref: Para. 9)

A22.         The roles of management and those charged with governance in agreeing the terms of the audit engagement for the entity depend on the governance structure of the entity and relevant law or regulation.

Audit Engagement Letter or Other Form of Written Agreement[16] (Ref: Para. 10‑11)

A23.         It is in the interests of both the entity and the auditor, that the auditor sends an audit engagement letter before the