Chartered Accountants Auditing & Assurance Handbook 2013 + Wiley E–Text: Incorporating all the Standards as at 1 December 2012

The Institute of Chartered AccountantsAustralia s  Auditing, Assurance and Ethics Handbook2013 incorporates all of the Australian Auditing andAssurance Standards in Clarity format, Guidance Statements andProfessional and Ethical Standards issued as at 1 December2012.

New to the 2013 edition are: 
The Standard on Assurance Engagements ASAE3410 Assurance Engagements on Greenhouse GasStatements  Two new Standards on Assurance Engagements ASAE 3420 and ASAE3450, which relate to assurance engagements in the context offundraisings  The Standard on Related Services ASRS 4450 ComfortLetter Engagements  Guidance Statement GS 020 Special Considerations inAuditing Financial Instruments  APESB Guidance Note GN 40 Ethical Conflicts in theWorkplace – Considerations for Members in Business

Where necessary, Standards have also been updated for the minoramendments included in the AUASB s amending Standards.

For material issued after 1 December 2012, please refer toauasb.gov.au and apesb.org.au, which are regularly updatedthroughout the year.

The companion volume to this handbook, the Institute ofChartered Accountants Australia s Financial ReportingHandbook 2013, brings together all of the Australian AccountingStandards and Interpretations as issued at 1 December 2012.

Foreword v

About the Technical Editor vi

Introduction xii

About the Institute of Chartered Accountants Australia xv

Overview xvi

Understanding Financial Statement Audits: A Guide for FinancialStatement Users 1

AUASB Framework and Policy Documents

Foreword to AUASB Pronouncements 30

AUASB Glossary 37

Framework for Assurance Engagements 60

Principles of Convergence to International Standards of theInternational Auditing and Assurance Standards Board (IAASB) andHarmonisation with the Standards

of the New Zealand Auditing and Assurance Standards Board(NZAuASB) 80

Australian Accounting Standards (ASAs)

Introduction

ASQC 1 Quality Control for Firms that Perform Audits and Reviewsof Financial Reports and Other Financial Information, and OtherAssurance Engagements 85

ASA 100 Preamble to AUASB Standards 113

ASA 101 Preamble to Australian Auditing Standards 122

ASA 102 Compliance with Ethical Requirements when PerformingAudits, Reviews and Other Assurance Engagements 128

Responsibilities

ASA 200 Overall Objectives of the Independent Auditor and theConduct of an Audit in Accordance with Australian AuditingStandards 135

ASA 210 Agreeing the Terms of Audit Engagements 160

ASA 220 Quality Control for an Audit of a Financial Report andOther Historical Financial Information 178

ASA 230 Audit Documentation 194

ASA 240 The Auditor s Responsibilities Relating to Fraudin an Audit of a Financial Report 206

ASA 250 Consideration of Laws and Regulations in an Audit of aFinancial Report 240

ASA 260 Communication with Those Charged with Governance 252

ASA 265 Communicating Deficiencies in Internal Control to ThoseCharged with Governance and Management 270

Planning

ASA 300 Planning an Audit of a Financial Report 280

ASA 315 Identifying and Assessing the Risks of MaterialMisstatement through Understanding the Entity and Its Environment291

ASA 320 Materiality in Planning and Performing an Audit 327

ASA 330 The Auditor s Responses to Assessed Risks 336

Internal control

ASA 402 Audit Considerations Relating to an Entity Using aService Organisation 354

ASA 450 Evaluation of Misstatements Identified during the Audit372

ASA 500 Audit Evidence 382

ASA 501 Audit Evidence Specific Considerations forInventory and Segment Information 396

ASA 502 Audit Evidence Specific Considerations forLitigation and Claims 405

ASA 505 External Confirmations 417

ASA 510 Initial Audit Engagements Opening Balances 427

Explanatory Guide: Opening Balances 439

ASA 520 Analytical Procedures 455

ASA 530 Audit Sampling 463

ASA 540 Auditing Accounting Estimates, Including Fair ValueAccounting Estimates, and Related Disclosures 475

ASA 550 Related Parties 508

ASA 560 Subsequent Events 530

ASA 570 Going Concern 541

ASA 580 Written Representations 566

Using the work of others

ASA 600 Special Considerations Audits of a Group FinancialReport (Including the Work of Component Auditors) 580

ASA 610 Using the Work of Internal Auditors 617

ASA 620 Using the Work of an Auditor s Expert 627

Audit conclusions and Reporting

Explanatory Guide: Auditor s Reports 642

ASA 700 Forming an Opinion and Reporting on a Financial Report656

ASA 705 Modifications to the Opinion in the IndependentAuditor s Report 686

ASA 706 Emphasis of Matter Paragraphs and Other MatterParagraphs in the Independent Auditor s Report 709

ASA 710 Comparative Information Corresponding Figures andComparative Financial Reports 724

ASA 720 The Auditor s Responsibilities Relating to OtherInformation in Documents Containing an Audited Financial Report744

Specialised Areas

ASA 800 Special Considerations Audits of Financial ReportsPrepared in Accordance with Special Purpose Frameworks 751

ASA 805 Special Considerations Audits of Single FinancialStatementsand Specific Elements, Accounts or Items of a FinancialStatement 768

ASA 810 Engagements to Report on Summary Financial Statements783

Standards on Review Engagements (ASRes)

Explanatory Guide to AUASB Standards Applicable to ReviewEngagements 803

ASRE 2400 Review of a Financial Report Performed by an AssurancePractitioner Who is Not the Auditor of the Entity 810

ASRE 2405 Review of Historical Financial Information Other thana Financial Report 852

ASRE 2410 Review of a Financial Report Performed by theIndependent Auditor of the Entity 881

ASRE 2415 Review of a Financial Report Company Limitedby Guarantee 929

Standards on Assurance Engagements (ASAEs)

ASAE 3000 Assurance Engagements other than Audits or Reviews ofHistorical Financial Information 936

ASAE 3100 Compliance Engagements 958

ASAE 3402 Assurance Reports on Controls at a ServiceOrganisation 977

ASAE 3410 Assurance Engagements on Greenhouse Gas Statements1023

ASAE 3420 Assurance Engagements to Report on the Compilation ofPro Forma Historical Financial Information included in a Prospectusor other Document 1084

ASAE 3450 Assurance Engagements involving Corporate Fundraisingsand/or Prospective Financial Information 1121

ASAE 3500 Performance Engagements 1214

Standards on Related Services (ASRSs)

ASRS 4400 Agreed–Upon Procedures Engagements to Report FactualFindings 1233

ASRS 4450 Comfort Letter Engagements 1255

Auditing and Assurance Standards (AUSs)

AUS 804 The Audit of Prospective Financial Information 1292

AUS 810 Special Purpose Reports on the Effectiveness of ControlProcedures 1305

Auditing and Assurance Guidance Statements (AGSs)

AGS 1014 Privity Letter Requests 1327

AGS 1062 Reporting in Connection with Proposed Fundraisings1336

Guidance Statements (GSs)

GS 001 Concise Financial Reports Under the Corporations Act 20011368

GS 002 Special Considerations in the Audit of RiskManagement

Requirements for Registrable Superannuation Entities andLicensees 1387

GS 003 Audit and Review Requirements for Australian FinancialServices Licensees under the Corporations Act 2001 1403

GS 004 Audit Implications of Prudential Reporting Requirementsfor General Insurers 1428

GS 005 Using the Work of an Actuary 1457

GS 006 Electronic Publication of the Auditor s Report1463

GS 007 Audit Implications of the Use of Service Organisationsfor Investment Management Services 1470

GS 008 The Auditor s Report on a Remuneration Reportunder

Section 300A of the Corporations Act 2001 1520

GS 009 Auditing Self–Managed Superannuation Funds 1528

GS 010 Responding to Questions at an Annual General Meeting1629

GS 011 Third Party Access to Audit Working Papers 1637

GS 012 Prudential Reporting Requirements for Auditors ofAuthorised Deposit–taking Institutions 1662

GS 013 Special Considerations in the Audit of Compliance Plansof Managed Investment Schemes 1712

GS 014 Auditing Mortgage Schemes 1727

GS 015 Audit Implications of Accounting for Investments inAssociates 1733

GS 016 Bank Confirmation Requests 1741

GS 017 Prudential Reporting Requirements for Auditors of a LifeCompany 1763

GS 018 Franchising Code of Conduct Auditor sReports 1793

GS 019 Auditing Fundraising Revenue of Not–for–Profit Entities1800

GS 020 Special Considerations in Auditing Financial Instruments1817

Accounting Professional and Ethical Standards Board Statements(APES)

APES 110 Code of Ethics for Professional Accountants 1861

APES 205 Conformity with Accounting Standards 1958

APES 210 Conformity with Auditing and Assurance Standards1963

APES 215 Forensic Accounting Services 1967

APES 220 Taxation Services 1976

APES 225 Valuation Services 1984

APES 305 Terms of Engagement 1999

APES 310 Dealing with Client Monies 2004

APES 315 Compilation of Financial Information 2015

APES 320 Quality Control for Firms 2027

APES 320 APESB Technical Update 2053

APES 325 Risk Management for Firms 2054

APES 330 Insolvency Services 2059

APES 345 Reporting on Prospective Financial Information Preparedin connection with a Disclosure Document 2075

APES 350 Participation by Members in Public Practice in DueDiligence Committees in connection with a Public Document 2083

APES GN 40 Members in Business Guidance Note Ethical Conflictsin the Workplace Considerations for Members in Business2105

Miscellaneous Professional Statements

APS 12 Statement of Financial Advisory Service Standards2142

Stephanie Kemp, MA (Dunelm), FCA is a consultant withWestworth Kemp Consultants specialising in financial reporting andauditing standards. For a number of years, she was part of theLeadership and Quality Team at the Institute of CharteredAccountants Australia. Stephanie is the author of numerous articlesin the Institute s journal Charter, and has provided regulartechnical updates to accounting professionals via theInstitute s electronic newsletter Accounting and Audit NewsToday (ANT). Before joining the team at the Institute, Stephanieworked as an auditor, and then in the internal quality control andtechnical sections of medium and large accounting firms in theUnited Kingdom and Australia.