Document ID: chunk:federal_register_of_legislation:F2021C01247:reg:10:p7
Version: federal_register_of_legislation:F2021C01247
Segment Type: reg
Provision Reference: reg 10 (pt 7/21)
Character Range: 24085–27054

auditor from complying with a requirement, the auditor where possible, performs appropriate alternative audit procedures.[11]

A10.         Application of some of the requirements of the Auditing Standards in an audit of a special purpose financial report may require special consideration by the auditor.  For example, in ASA 320, judgements about matters that are material to users of the financial report are based on a consideration of the common financial information needs of users as a group.[12]  In the case of an audit of a special purpose financial report, however, those judgements are based on a consideration of the financial information needs of the intended users.

A11.         In the case of a special purpose financial report, such as those prepared in accordance with the requirements of a contract, management may agree with the intended users on a threshold below which misstatements identified during the audit will not be corrected or otherwise adjusted.  The existence of such a threshold does not relieve the auditor from the requirement to determine materiality in accordance with ASA 320 for purposes of planning and performing the audit of the special purpose financial report.

A12.         ASA 260 requires the auditor to determine the appropriate person(s) within the entity's governance structure with whom to communicate.[13]  ASA 260 notes that, in some cases, all of those charged governance are involved in managing the entity, and the application of the communication requirements is modified to recognise this position.[14]  When a general purpose financial report is also prepared by the entity, those person(s) responsible for the oversight of the preparation of the special purpose financial report may not be the same as those charged with governance responsible for the oversight of the preparation of that general purpose financial report.

Forming an Opinion and Reporting Considerations (Ref: Para. 11)

A13.         The Appendix to this Auditing Standard contains illustrations of independent auditors' reports on a special purpose financial report.  Other illustrations of auditor's reports may be relevant to reporting on a special purpose financial report (see for example, the Appendices to ASA 700, ASA 705,[15] ASA 570,[16] ASA 720, and ASA 706[17]).

Application of ASA 700 When Reporting on a Special Purpose Financial Report

A14.         Paragraph 11 of this Auditing Standard explains that the auditor is required to apply ASA 700 when forming an opinion and reporting on a special purpose financial report.  In doing so, the auditor is also required to apply the reporting requirements in other Auditing Standards and may find the special considerations addressed in paragraphs A15–A19 below helpful.

Going Concern

A15.         A special purpose financial report may or may not be prepared in accordance with a financial reporting framework for which the going concern basis of accounting is relevant (e.g.,