Document ID: chunk:federal_register_of_legislation:F2019L00016:reg:21:p3
Version: federal_register_of_legislation:F2019L00016
Segment Type: reg
Provision Reference: reg 21 (pt 3/4)
Character Range: 44884–48088

as follows:

           * Significant The methods, the data, and the significant assumptions used by us in making accounting estimates, including those measured at fair value, and their related disclosures are appropriate to achieve recognition, measurement or disclosure that is reasonable in the context of the applicable financial reporting framework. (ASA 540)

Amendments to ASA 700

56.               Existing paragraph 13 is amended to read as follows:

In particular, the auditor shall evaluate whether, in view of the requirements of the applicable financial reporting framework:

(a)                …

(b)                …

(c)                The accounting estimates and related disclosures made by management are reasonable;

(d)                …

57.               Footnote 8 is inserted to this Auditing Standard to read as follows:

[Deleted by the AUASB. Refer Aus 8.1]

58.               As a result of the insertion of footnote 8 of this Auditing Standard, subsequent footnotes of this Auditing Standard are re‑numbered and references to these footnotes are updated accordingly.

59.               Existing footnote 40 in paragraph A84 is amended to read as follows:

See revised ASA 720 The Auditor's Responsibilities Relating to Other Information.

Amendments to ASA 701

60.               Existing paragraph 9 is amended to read as follows:

The auditor shall determine, from the matters communicated with those charged with governance, those matters that required significant auditor attention in performing the audit. In making this determination, the auditor shall take into account the following: (Ref: Para. A9- A18)

(a)                …

(b)                Significant auditor judgements relating to areas in the financial report that involved significant management judgement, including accounting estimates that have been identified as having are subject to a high degree of estimation uncertainty. (Ref: Para. A23‑A24)

(c)                …

61.               The existing sub‑heading following paragraph A22 is amended to read as follows:

Significant Auditor Judgements Relating to Areas in the Financial Report that Involved Significant Management Judgement, Including Accounting Estimates that Have Been Identified as Having Are Subject to a High Degree of Estimation Uncertainty (Ref: Para. 9(b))

62.               Existing paragraph A24 is amended to read as follows:

However, users of the financial report have highlighted their interest in accounting estimates that have been identified as having are subject to a high degree of estimation uncertainty in accordance with (see ASA 54028) that may have not been determined to be significant risks. Among other things, such estimates are highly dependent on management judgement and are often the most complex areas of the financial report, and may require the involvement of both a management's expert and an auditor's expert. Users have also highlighted that accounting policies that have a significant effect on the financial report (and significant changes to those policies) are relevant to their understanding of the financial report, especially in circumstances where an entity's practices are not consistent