Auditing Standard ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements (reissued March 2018)

Explanatory Statement

ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements (reissued March 2018)

Issued by the Auditing and Assurance Standards Board

Obtaining a Copy of this Explanatory Statement

This Explanatory Statement is available on the Auditing and Assurance Standards Board (AUASB) website: www.auasb.gov.au

Contact Details

Reasons for Reissuing ASA 102

The Auditing and Assurance Standards Board (AUASB) reissue Australian Auditing Standard ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements pursuant to the requirements of the legislative provisions and the Strategic Direction explained below.

The AUASB is a non corporate Commonwealth entity of the Australian Government established under section 227A of the Australian Securities and Investments Commission Act 2001, as amended (ASIC Act).  Under section 336 of the Corporations Act 2001, the AUASB may make Auditing Standards for the purposes of the corporations legislation.  These Auditing Standards are legislative instruments under the Legislation Act 2003.

Under the Strategic Direction given to the AUASB by the Financial Reporting Council (FRC), the AUASB is required, inter alia, to develop auditing standards that have a clear public interest focus and are of the highest quality.

ASA 102 is an Auditing Standard made under the Corporations Act 2001 for Australian legislative purposes. ASA 102 enables references to relevant ethical requirements in other AUASB Standards to remain current as they are explicitly linked to ASA 102.  Under ASA 102 the auditor, assurance practitioner, engagement quality control reviewer, and firm are to have regard to the applicable requirements of APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional & Ethical Standards Board Limited (December 2010 incorporating all amendments to May 2017), which are to be taken into account in determining whether relevant ethical requirements have been met.  The AUASB proposes to amend or re-make ASA 102 whenever APES 110 is amended or revised, to ensure that such cross references remain current and to eliminate the need to amend other AUASB Standards.

The requirement and application and other explanatory material in ASA 102 have been drawn from several standards of the International Auditing and Assurance Standards Board (IAASB).

The AUASB has made ASA 102 in a format that is consistent with the other Australian Auditing Standards operative for financial reporting periods commencing on or after 1 January 2010 and for firms required to establish systems of quality control in compliance with ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements and Related Services Engagements by 1 January 2010.

Purpose of ASA 102

The purpose of ASA 102 is to require auditors, assurance practitioners, engagement quality control and firms to comply with relevant ethical requirements, including those pertaining to independence, when performing audits, reviews and other assurance engagements. .

Main Features

The main feature of the reissuing of this Auditing Standard is to update the reference within the relevant ethical requirements definition to the latest version of APES 110 Code of Ethics for Professional Accountants issued by the Australian Professional & Ethical Standards Board Limited.

Operative Date

ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements (reissued March 2018) is operative for engagements with financial reporting periods ending on or after 31 March 2018.

Process of making Australian Auditing Standards

The AUASB’s Strategic Direction, inter alia, provides that the AUASB develop Australian Auditing Standards that:

• have a clear public interest focus and are of the highest quality;
• use the International Standards on Auditing (ISAs) of the International Auditing and Assurance Standards Board (IAASB) as the underlying standards;
• conform with the Australian regulatory environment; and
• are capable of enforcement.

Consultation Process prior to issuing ASA 102

It is the view of the AUASB that these changes do not require public exposure as they are not significant in nature, and have no impact on the requirements of ASA 102.

Regulatory Impact Statement

A Preliminary Assessment form has been  prepared in connection with the preparation of ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements (reissued March 2018) and lodged with the Office of Best Practice Regulation (OBPR).

The OBPR have advised the AUASB Technical Group that a Regulatory Impact Statement (RIS) is not required in relation to this standard.