Document ID: chunk:federal_register_of_legislation:F2023C00370:reg:9:p4
Version: federal_register_of_legislation:F2023C00370
Segment Type: reg
Provision Reference: reg 9 (pt 4/13)
Character Range: 14874–17999

Opinion in the Predecessor Auditor's Report

13.               If the predecessor auditor's opinion regarding the prior period's financial report included a modification to the auditor's opinion that remains relevant and material to the current period's financial report, the auditor shall modify the auditor's opinion on the current period's financial report in accordance with ASA 705 and ASA 710.  (Ref: Para. A9)

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Application and Other Explanatory Material

Audit Procedures

Considerations Specific to Public Sector Entities (Ref: Para. 6)

A1.             In the public sector, there may be legal or regulatory limitations on the information that the current auditor can obtain from a predecessor auditor.  For example, if a public sector entity that has previously been audited by a statutorily appointed auditor (for example, an Auditor‑General, or other suitably qualified person appointed on behalf of the Auditor‑General) is privatised, the amount of access to working papers or other information that the statutorily appointed auditor can provide a newly appointed auditor that is in the private sector may be constrained by privacy laws or regulations.  In situations where such communications are constrained, audit evidence may need to be obtained through other means and, if sufficient appropriate audit evidence cannot be obtained, consideration given to the effect on the auditor's opinion.

A2.             If the statutorily appointed auditor outsources an audit of a public sector entity to a private sector audit firm, and the statutorily appointed auditor appoints an audit firm other than the firm that audited the financial report of the public sector entity in the prior period, this is not usually regarded as a change in auditors for the statutorily appointed auditor.  Depending on the nature of the outsourcing arrangement, however, the audit engagement may be considered an initial audit engagement from the perspective of the private sector auditor in fulfilling their responsibilities, and therefore this Auditing Standard applies.

Opening Balances (Ref: Para. 6(c))

A3.             The nature and extent of audit procedures necessary to obtain sufficient appropriate audit evidence regarding opening balances depend on such matters as:

           * The accounting policies followed by the entity.

           * The nature of the account balances, classes of transactions and disclosures and the risks of material misstatement in the current period's financial report.

           * The significance of the opening balances relative to the current period's financial report.

           * Whether the prior period's financial report was audited and, if so, whether the predecessor auditor's opinion was modified.

A4.             If the prior period's financial report was audited by a predecessor auditor, the auditor may be able to obtain sufficient appropriate audit evidence regarding the opening balances by reviewing the predecessor auditor's working papers.  Whether such a review provides sufficient appropriate audit evidence is influenced by the professional competence