Document ID: chunk:federal_register_of_legislation:F2023C00337:reg:1:p3
Version: federal_register_of_legislation:F2023C00337
Segment Type: reg
Provision Reference: reg 1 (pt 3/23)
Character Range: 15373–18493

management that it acknowledges and understands its responsibility: (Ref: Para. A11‑A14, A19, A21-Aus A21.1)

(i)                 For the preparation of the financial report in accordance with the applicable financial reporting framework, including where relevant their fair presentation; (Ref: Para. A15)

(ii)               For such internal control as management determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error; and (Ref: Para. A16‑A19)

(iii)             To provide the auditor with:

                 a. Access to all information of which management is aware that is relevant to the preparation of the financial report such as records, documentation and other matters;

                 b. Additional information that the auditor may request from management for the purpose of the audit; and (Ref: Para. A20)

                 c. Unrestricted access to persons within the entity from whom the auditor determines it necessary to obtain audit evidence.

Limitation on Scope Prior to Audit Engagement Acceptance

7.                   If management or those charged with governance impose a limitation on the scope of the auditor's work in the terms of a proposed audit engagement such that the auditor believes the limitation will result in the auditor disclaiming an opinion on the financial report, the auditor shall not accept such a limited engagement as an audit engagement, unless required by law or regulation to do so.

Other Factors Affecting Audit Engagement Acceptance

8.                   If the preconditions for an audit are not present, the auditor shall discuss the matter with management.  Unless required by law or regulation to do so, the auditor shall not accept the proposed audit engagement:

(a)                If the auditor has determined that the financial reporting framework to be applied in the preparation of the financial report is unacceptable, except as provided in paragraph 19 of this Auditing Standard; or

(b)                If the agreement referred to in paragraph 6(b) of this Auditing Standard has not been obtained.

Agreement on Audit Engagement Terms

9.                   The auditor shall agree the terms of the audit engagement with management or those charged with governance, as appropriate.  (Ref: Para. A22)

10.               Subject to paragraph 11 of this Auditing Standard, the agreed terms of the audit engagement shall be recorded in an audit engagement letter or other suitable form of written agreement and shall include: (Ref: Para. A23‑A26)

(a)                The objective and scope of the audit of the financial report;

(b)                The responsibilities of the auditor;

(c)                The responsibilities of management;

(d)                Identification of the applicable financial reporting framework for the preparation of the financial report; and

(e)                Reference to the expected form and content of any reports to be issued by the auditor and a statement that there may be circumstances in which a report may differ from its