Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p23
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 23/57)
Character Range: 73205–76359

improve the situation.  (Ref: Para. 19)

A27.         For example, if the auditor's review procedures lead the auditor to question whether a significant sales transaction is recorded in accordance with the applicable financial reporting framework, the auditor performs additional procedures sufficient to resolve the auditor's questions, such as discussing the terms of the transaction with senior marketing and accounting personnel or reading the sales contract.  (Ref: Para. 21)

Comparatives – First Financial Report (Ref: Para. 22)

A28.         When comparative information is included in the first financial report and the auditor is unable to obtain sufficient appropriate review evidence to achieve the review objective, a limitation on the scope of the review exists and the auditor needs to modify the auditor's review report.  Ordinarily, a restriction on the scope of the auditor's work will result in a qualified ("except for") conclusion.  In such cases, ordinarily an auditor encourages clear disclosure in the financial report, that the auditor has been unable to review the comparatives.

A29.         When comparative information is included in the first financial report and the auditor believes a material adjustment should be made to the financial report, under paragraph 39, the auditor needs to modify the auditor's review report.

A30.         When an entity has come into existence only within the first financial reporting period, comparative information will not be provided in the first financial report and no modified auditor's review report is required.

A31.         Accounting Standard AASB 101 Presentation of Financial Statements provides requirements and explanatory guidance relating to comparative information included in a financial report prepared in accordance with Australian Accounting Standards.  Accounting Standard AASB 1 First‑time Adoption of Australian Accounting Standards provides requirements and guidance relating to comparative information when an entity adopts Australian Accounting Standards for the first time.

Evaluation of Misstatements (Ref: Para. 23)

A32.         A review of a financial report, in contrast to an audit engagement, is not designed to obtain reasonable assurance that the financial report is free from material misstatement.  However,  misstatements which come to the auditor's attention, including inadequate disclosures, need to be evaluated individually and in the aggregate to determine whether a material adjustment is required to be made to the financial report for it to be prepared, in all material respects, in accordance with the applicable financial reporting framework.

A33.         The auditor needs to exercise professional judgement in evaluating the materiality of any misstatements that the entity has not corrected. Ordinarily, the auditor considers matters such as the nature, cause and amount of the misstatements, whether the misstatements originated in the preceding year or current year, and the potential effect of the misstatements on future interim or annual periods.

A34.         The auditor may designate an amount below which misstatements need