Document ID: chunk:federal_register_of_legislation:F2023C01140:reg:39:p23
Version: federal_register_of_legislation:F2023C01140
Segment Type: reg
Provision Reference: reg 39 (pt 23/53)
Character Range: 74400–77399

financial institutions (such as banks, insurance companies, and superannuation funds), and other entities such as charities.

A42.         ASA 210 requires the auditor to agree the terms of the audit engagement with management and those charged with governance, as appropriate, and explains that the roles of management and those charged with governance in agreeing the terms of the audit engagement for the entity depend on the governance arrangements of the entity and relevant law or regulation.[31]  ASA 210 also requires the audit engagement letter or other suitable form of written agreement to include reference to the expected form and content of any reports to be issued by the auditor.[32]  When the auditor is not otherwise required to communicate key audit matters, ASA 210[33] explains that it may be helpful for the auditor to make reference in the terms of the audit engagement to the possibility of communicating key audit matters in the auditor's report and, in certain jurisdictions, it may be necessary for the auditor to include a reference to such possibility in order to retain the ability to do so.

Considerations specific to public sector entities

A43.         Listed entities are not common in the public sector.  However, public sector entities may be significant due to size, complexity or public interest aspects.  In such cases, an auditor of a public sector entity may be required by law or regulation or may otherwise decide to communicate key audit matters in the auditor's report.

Responsibilities for the Financial Report (Ref: Para. 33–34)

A44.         ASA 200 explains the premise, relating to the responsibilities of management and, where appropriate, those charged with governance, on which an audit in accordance with Australian Auditing Standards is conducted.[34]  Management and, where appropriate, those charged with governance accept responsibility for the preparation of the financial report in accordance with the applicable financial reporting framework, including, where relevant, their fair presentation.  Management also accepts responsibility for such internal control as it determines is necessary to enable the preparation of financial report that is free from material misstatement, whether due to fraud or error.  The description of management's responsibilities in the auditor's report includes reference to both responsibilities as it helps to explain to users the premise on which an audit is conducted.  ASA 260 uses the term those charged with governance to describe the person(s) or organisation(s) with responsibility for overseeing the entity, and provides a discussion about the diversity of governance structures across jurisdictions and by entity.

A45.         There may be circumstances when it is appropriate for the auditor to add to the descriptions of the responsibilities of management and those charged with governance in paragraphs 34–35 to reflect additional responsibilities that are relevant to the preparation of the