ASA 2015-1 - Amendments to Australian Auditing Standards - December 2015

Overview

The Auditing and Assurance Standards Board (AUASB), an independent statutory committee of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, has issued the Auditing Standard ASA 2015-1 Amendments to Australian Auditing Standards. The purpose of this standard is to amend various Australian Auditing Standards to align with the conforming amendments issued by the International Auditing and Assurance Standards Board concerning auditor reporting, the auditor's responsibilities regarding other information, and addressing financial statement disclosures during the audit of financial statements. These Auditing Standards are legislative instruments under the Legislative Instruments Act 2003. The AUASB ensures that the Auditing Standards have a clear public interest focus, are of the highest quality, and use the International Standards on Auditing as the underlying standards. The standards are designed to conform with the Australian regulatory environment and are capable of enforcement. The ASA 2015-1 Amendments to Australian Auditing Standards is effective for financial reporting periods ending on or after 15 December 2016. The AUASB conducted a consultation process prior to issuing the Auditing Standard, releasing three Exposure Drafts with respective comment periods. Submissions received were considered as part of the development and finalisation of the Auditing Standard. A Regulatory Impact Statement has been prepared and cleared by the Office of Best Practice Regulation. The Auditing Standards do not diminish or limit any applicable human rights or freedoms and are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The legislative instrument is compatible with human rights as it does not raise any human rights issues.

Scope and Application

The Auditing Standard ASA 2015-1 Amendments to Australian Auditing Standards applies to auditors, audit firms, and entities subject to audits in Australia. These amendments are made pursuant to the legislative provisions under the Australian Securities and Investments Commission Act 2001 and the Corporations Act 2001, reflecting the overarching public interest focus and high quality standards set by the Auditing and Assurance Standards Board (AUASB). The amendments primarily impact auditors and audit firms by updating their practices and responsibilities in accordance with international auditing standards, while entities subject to audits will experience changes in the scope and depth of audit processes. The standards are designed to enhance the quality of audits, ensuring that financial reports and related disclosures are accurate and reliable. The amendments are applicable nationwide across Australia, as the AUASB operates under Commonwealth jurisdiction, ensuring uniformity in auditing practices across different states and territories. The stated exclusions or exemptions are minimal, primarily focusing on specific cases where the standards may not apply due to the unique nature of certain entities or transactions. The AUASB extends or restricts the application of these standards through subordinate instruments as needed, ensuring the standards remain relevant and effective in addressing contemporary auditing challenges.

Key Provisions

The Auditing Standard ASA 2015-1 (referred to as ASA 2015-1) primarily serves to amend various Australian Auditing Standards (AAS) by incorporating changes made by the International Auditing and Assurance Standards Board (IAASB) concerning auditor reporting, auditor responsibilities related to other information, and addressing financial statement disclosures in the audit of financial statements (section 1). The amendments pertain to several AAS, including ASA 200, ASA 210, ASA 220, ASA 230, ASA 240, ASA 300, ASA 315, ASA 320, ASA 330, ASA 450, ASA 500, ASA 510, ASA 540, ASA 560, ASA 580, ASA 600, ASA 710, and ASA 800. ASA 2015-1 imposes several obligations on auditors and entities it governs. Auditors are required to adhere to the updated standards, ensuring they follow the revised requirements for auditor reporting, address the risks of material misstatement, and properly document their audits. Entities subject to audits must ensure their financial reports are audited in compliance with the updated standards, thereby maintaining transparency and accuracy in financial reporting. This includes ensuring that financial statements and related disclosures are prepared and audited in accordance with the latest AAS. Breach of the provisions outlined in ASA 2015-1 can result in civil or criminal consequences, depending on the severity and intent behind the non-compliance. Under the Corporations Act 2001, failure to comply with auditing standards can lead to penalties, including fines and imprisonment for individuals. Specifically, section 1308 of the Act stipulates that a person who contravenes an auditing standard may be subject to penalties, including fines of up to $210,000 for individuals and $1,050,000 for bodies corporate, alongside potential imprisonment for serious breaches. These provisions ensure that auditors and entities comply with the highest standards of financial reporting and auditing practices.