Document ID: chunk:federal_register_of_legislation:F2023C01156:reg:14:p3
Version: federal_register_of_legislation:F2023C01156
Segment Type: reg
Provision Reference: reg 14 (pt 3/22)
Character Range: 12752–15865

prepare the user entity's financial report from the records described in paragraph 3(b), including as it relates to disclosures and to accounting estimates relating to significant classes of transactions, account balances and disclosures; and

(d)                The entity's IT environment relevant to (a) to (c) above.

4.                   The nature and extent of work to be performed by the user auditor regarding the services provided by a service organisation depend on the nature and significance of those services to the user entity and the relevance of those services to the audit.

5.                   This Auditing Standard does not apply to services provided by financial institutions that are limited to processing, for an entity's account held at the financial institution, transactions that are specifically authorised by the entity, such as the processing of cheque account transactions by a bank or the processing of securities transactions by a broker.  In addition, this Auditing Standard does not apply to the audit of transactions arising from proprietary financial interests in other entities, such as partnerships, corporations and joint ventures, when proprietary interests are accounted for and reported to interest holders.

Aus 5.1 An auditor appointed to provide an opinion on an entity's financial report may also have additional statutory or regulatory responsibilities, which may be affected by the entity's use of a service organisation.  For example, sections 307(c) and 307(d) of the Corporations Act 2001(the Act) require the auditor to form an opinion on whether the entity has kept proper financial records, and other records and registers as required by that Act.

Effective Date

6.                   [Deleted by the AUASB.  Refer Aus 0.3]

Objectives

7.                   The objectives of the user auditor, when the user entity uses the services of a service organisation, are:

(a)                To obtain an understanding of the nature and significance of the services provided by the service organisation and their effect on the user entity's system of internal control, sufficient to provide an appropriate basis for the identification and assessment of the risks of material misstatement; and

(b)                To design and perform audit procedures responsive to those risks.

Definitions

8.                   For the purposes of this Auditing Standard, the following terms have the meanings attributed below:

(a)                Complementary user entity controls means controls that the service organisation assumes, in the design of its service, will be implemented by user entities, and which, if necessary to achieve control objectives, are identified in the description of its system.

(b)                Report on the description and design of controls at a service organisation (referred to in this Auditing Standard as a type 1 report) means a report that comprises:

             (i)                 A description, prepared by management of the service organisation, of the service organisation's system, control objectives and related controls that