Document ID: chunk:federal_register_of_legislation:F2023C01128:reg:17:p13
Version: federal_register_of_legislation:F2023C01128
Segment Type: reg
Provision Reference: reg 17 (pt 13/25)
Character Range: 42375–45706

financial report may be particularly relevant to those charged with governance in discharging their responsibilities for oversight of the financial reporting process.  For example, in relation to the matters described in paragraph A19, those charged with governance may be interested in the auditor's views on the degree to which complexity, subjectivity or other inherent risk factors affect the selection or application of the methods, assumptions and data used in making a significant accounting estimate, as well as the auditor's evaluation of whether management's point estimate and related disclosures in the financial report are reasonable in the context of the applicable financial reporting framework. Open and constructive communication about significant qualitative aspects of the entity's accounting practices also may include comment on the acceptability of significant accounting practices and on the quality of the disclosures. When applicable, this may include whether a significant accounting practice of the entity relating to accounting estimates is considered by the auditor not be most appropriate to the particular circumstances of the entity, for example, when an alternative acceptable method for making an accounting estimate would, in the auditor's judgment, be more appropriate.  Appendix 2 identifies matters that may be included in this communication.

Significant Difficulties Encountered during the Audit (Ref: Para. 16(b))

A21.         Significant difficulties encountered during the audit may include such matters as:

           * Significant delays by management, the unavailability of entity personnel, or an unwillingness by management to provide information necessary for the auditor to perform the auditor's procedures.

           * An unreasonably brief time within which to complete the audit.

           * Extensive unexpected effort required to obtain sufficient appropriate audit evidence.

           * The unavailability of expected information.

           * Restrictions imposed on the auditor by management.

           * Management's unwillingness to make or extend its assessment of the entity's ability to continue as a going concern when requested.

    In some circumstances, such difficulties may constitute a scope limitation that leads to a modification of the auditor's opinion.[13]

Significant Matters Discussed, or Subject to Correspondence with Management (Ref: Para. 16(c)(i))

A22.         Significant matters discussed, or subject to correspondence with management may include such matters as:

           * Significant events or transactions that occurred during the year.

           * Business conditions affecting the entity, and business plans and strategies that may affect the risks of material misstatement.

           * Concerns about management's consultations with other accountants on accounting or auditing matters.

           * Discussions or correspondence in connection with the initial or recurring appointment of the auditor regarding accounting practices, the application of auditing standards, or fees for audit or other services.

           * Significant matters on which there was disagreement with management, except for initial differences of opinion because of incomplete facts or preliminary information that are later resolved by the