Document ID: chunk:federal_register_of_legislation:F2021C01264:body:0:p4
Version: federal_register_of_legislation:F2021C01264
Segment Type: other
Provision Reference: 
Character Range: 9430–12676

purpose of expressing an opinion on the effectiveness of internal control.  The auditor may identify control deficiencies in internal control not only during this risk assessment process but also at any other stage of the audit.  This Auditing Standard specifies which identified deficiencies the auditor is required to communicate to those charged with governance and management.

      3. Nothing in this Auditing Standard precludes the auditor from communicating to those charged with governance and management other internal control matters that the auditor has identified during the audit.

Effective Date

4.                   [Deleted by the AUASB.  Refer Aus 0.3]

Objective

5.                   The objective of the auditor is to communicate appropriately to those charged with governance and management, deficiencies in internal control that the auditor has identified during the audit and that, in the auditor's professional judgement, are of sufficient importance to merit their respective attentions.

Definitions

6.                   For the purposes of this Auditing Standard, the following terms have the meanings attributed below:

(a)                Deficiency in internal control means:

(i)                 A control is designed, implemented or operated in such a way that it is unable to prevent, or detect and correct, misstatements in the financial report on a timely basis; or

(ii)               A control necessary to prevent, or detect and correct, misstatements in the financial report on a timely basis is missing.

(b)                Significant deficiency in internal control means a deficiency or combination of deficiencies in internal control that, in the auditor's professional judgement, is of sufficient importance to merit the attention of those charged with governance.  (Ref: Para. A5)

Requirements

7.                   The auditor shall determine whether, on the basis of the audit work performed, the auditor has identified one or more deficiencies in internal control.  (Ref: Para. A1‑A4)

8.                   If the auditor has identified one or more deficiencies in internal control, the auditor shall determine, on the basis of the audit work performed, whether, individually or in combination, they constitute significant deficiencies.  (Ref: Para. A5‑A11)

9.                   The auditor shall communicate in writing significant deficiencies in internal control identified during the audit to those charged with governance on a timely basis.  (Ref: Para. A12‑A18, A27)

10.               The auditor shall also communicate to management at an appropriate level of responsibility on a timely basis:  (Ref: Para. A19, A27)

(a)                In writing, significant deficiencies in internal control that the auditor has communicated or intends to communicate to those charged with governance, unless it would be inappropriate to communicate directly to management in the circumstances; and  (Ref: Para. A14, A20‑A21)

(b)                Other deficiencies in internal control identified during the audit that have not been communicated to management by other parties and that, in the auditor's professional judgement, are of sufficient importance to merit management's attention.  (Ref: Para.