Document ID: chunk:federal_register_of_legislation:F2023C01120:reg:3:p6
Version: federal_register_of_legislation:F2023C01120
Segment Type: reg
Provision Reference: reg 3 (pt 6/12)
Character Range: 25588–28802

the audit complies with the Australian Auditing Standards.  However, it is neither necessary nor practicable for the auditor to document every matter considered, or professional judgement made, in an audit.  Further, it is unnecessary for the auditor to document separately (as in a checklist, for example) compliance with matters for which compliance is demonstrated by documents included within the audit file.  For example:

           * The existence of an adequately documented audit plan demonstrates that the auditor has planned the audit.

           * The existence of a signed engagement letter in the audit file demonstrates that the auditor has agreed the terms of the audit engagement with management or, where appropriate, those charged with governance.

           * An auditor's report containing an appropriately qualified opinion on the financial report demonstrates that the auditor has complied with the requirement to express a qualified opinion under the circumstances specified in the Australian Auditing Standards.

           * In relation to requirements that apply generally throughout the audit, there may be a number of ways in which compliance with them may be demonstrated within the audit file:

                   + For example, there may be no single way in which the auditor's professional scepticism is documented.  But the audit documentation may nevertheless provide evidence of the auditor's exercise of professional scepticism in accordance with the Australian Auditing Standards.  For example, in relation to accounting estimates, when the audit evidence obtained includes evidence that both corroborates and contradicts management's assertions, documenting how the auditor evaluated that evidence, including the professional judgements made in forming a conclusion as to the sufficiency and appropriateness of the audit evidence obtained.

                   + Similarly, that the engagement partner has taken responsibility for the direction, and supervision of the engagement team and the review of their work[5]may be evidenced in a number of ways within the audit documentation.  This may include documentation that evidences the engagement partner's sufficient and appropriate involvement in the audit, such as participation in engagement team discussions.

Documentation of Significant Matters and Related Significant Professional Judgements (Ref: Para. 8(c))

A8.             Judging the significance of a matter requires an objective analysis of the facts and circumstances.  Examples of significant matters include:

           * Matters that give rise to significant risks (as defined in ASA 315).[6]

           * Results of audit procedures indicating (a) that the financial report could be materially misstated, or (b) a need to revise the auditor's previous assessment of the risks of material misstatement and the auditor's responses to those risks.

           * Circumstances that cause the auditor significant difficulty in applying necessary audit procedures.

           * Findings that could result in a modification to the audit opinion or the inclusion of an Emphasis of Matter paragraph in the auditor's report.

A9.             An important factor