Document ID: chunk:federal_register_of_legislation:F2023C00337:reg:1:p16
Version: federal_register_of_legislation:F2023C00337
Segment Type: reg
Provision Reference: reg 1 (pt 16/23)
Character Range: 51749–54849

standards setting organisation with additional requirements relating to the preparation of the financial report.  In those jurisdictions, the applicable financial reporting framework for the purposes of applying the Australian Auditing Standards encompasses both the identified financial reporting framework and such additional requirements provided they do not conflict with the identified financial reporting framework.  This may, for example, be the case when law or regulation prescribes disclosures in addition to those required by the financial reporting standards or when they narrow the range of acceptable choices that can be made within the financial reporting standards.[20]

Financial Reporting Framework Prescribed by Law or Regulation—Other Matters Affecting Acceptance (Ref: Para. 19)

A37.         Law or regulation may prescribe that the wording of the auditor's opinion use the phrases "present fairly, in all material respects" or "give a true and fair view" in a case where the auditor concludes that the applicable financial reporting framework prescribed by law or regulation would otherwise have been unacceptable.  In this case, the terms of the prescribed wording of the auditor's report are significantly different from the requirements of Australian Auditing Standards (see paragraph 21).

Auditor's Report Prescribed by Law or Regulation (Ref: Para. 21)

A38.         Australian Auditing Standards require that the auditor shall not represent compliance with Australian Auditing Standards unless the auditor has complied with all of the Australian Auditing Standards relevant to the audit.[21]  When law or regulation prescribes the layout or wording of the auditor's report in a form or in terms that are significantly different from the requirements of Australian Auditing Standards and the auditor concludes that additional explanation in the auditor's report cannot mitigate possible misunderstanding, the auditor may consider including a statement in the auditor's report that the audit is not conducted in accordance with Australian Auditing Standards.  The auditor is, however, encouraged to apply Australian Auditing Standards, including the Australian Auditing Standards that address the auditor's report, to the extent practicable, notwithstanding that the auditor is not permitted to refer to the audit being conducted in accordance with Australian Auditing Standards.

Considerations Specific to Public Sector Entities

A39.         In the public sector, specific requirements may exist within the legislation governing the audit mandate; for example, the auditor may be required to report directly to a minister, the legislature or the public if the entity attempts to limit the scope of the audit.

Appendix 1

(Ref: Para. A23‑A26)

Example of an Audit Engagement Letter

The following is an example of an audit engagement letter for an audit of a general purpose financial report prepared in accordance with Australian Accounting Standards and the Corporations Act 2001.  This letter is not authoritative but is intended only to be a guide that may be used