Chartered Accountants Auditing and Assurance Handbook 2013 Incorporating all the Standards as at 1 December 2012

• The Standard on Assurance Engagements ASAE 3410 Assurance Engagements on Greenhouse Gas Statements 
• Two new Standards on Assurance Engagements ASAE 3420 and ASAE 3450, which relate to assurance engagements in the context of fundraisings 
• The Standard on Related Services ASRS 4450 Comfort Letter Engagements 
• Guidance Statement GS 020 Special Considerations in Auditing Financial Instruments 
• APESB Guidance Note GN 40 Ethical Conflicts in the Workplace ? Considerations for Members in Business

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

For material issued after 1 December 2012, please refer to auasb.gov.au and apesb.org.au, which are regularly updated throughout the year.

The companion volume to this handbook, the Institute of Chartered Accountants Australia?s Financial Reporting Handbook 2013, brings together all of the Australian Accounting Standards 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 Financial Statement 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 the International Auditing and Assurance Standards Board (IAASB) and Harmonisation 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 Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements 85

ASA 100 Preamble to AUASB Standards 113

ASA 101 Preamble to Australian Auditing Standards 122

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

Responsibilities

ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards 135

ASA 210 Agreeing the Terms of Audit Engagements 160

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

ASA 230 Audit Documentation 194

ASA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of a Financial Report 206

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

ASA 260 Communication with Those Charged with Governance 252

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

Planning

ASA 300 Planning an Audit of a Financial Report 280

ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment 291

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 a Service Organisation 354

ASA 450 Evaluation of Misstatements Identified during the Audit 372

ASA 500 Audit Evidence 382

ASA 501 Audit Evidence—Specific Considerations for Inventory and Segment Information 396

ASA 502 Audit Evidence—Specific Considerations for Litigation 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 Value Accounting 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 Financial Report (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 Report 656

ASA 705 Modifications to the Opinion in the Independent Auditor’s Report 686

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

ASA 710 Comparative Information—Corresponding Figures and Comparative Financial Reports 724

ASA 720 The Auditor’s Responsibilities Relating to Other Information in Documents Containing an Audited Financial Report 744

Specialised Areas

ASA 800 Special Considerations—Audits of Financial Reports Prepared in Accordance with Special Purpose Frameworks 751

ASA 805 Special Considerations—Audits of Single Financial Statementsand Specific Elements, Accounts or Items of a Financial Statement 768

ASA 810 Engagements to Report on Summary Financial Statements 783

Standards on Review Engagements (ASRes)

Explanatory Guide to AUASB Standards Applicable to Review Engagements 803

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

ASRE 2405 Review of Historical Financial Information Other than a Financial Report 852

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

ASRE 2415 Review of a Financial Report – Company Limited by Guarantee 929

Standards on Assurance Engagements (ASAEs)

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

ASAE 3100 Compliance Engagements 958

ASAE 3402 Assurance Reports on Controls at a Service Organisation 977

ASAE 3410 Assurance Engagements on Greenhouse Gas Statements 1023

ASAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Historical Financial Information included in a Prospectus or other Document 1084

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

ASAE 3500 Performance Engagements 1214

Standards on Related Services (ASRSs)

ASRS 4400 Agreed–Upon Procedures Engagements to Report Factual Findings 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 Control Procedures 1305

Auditing and Assurance Guidance Statements (AGSs)

AGS 1014 Privity Letter Requests 1327

AGS 1062 Reporting in Connection with Proposed Fundraisings 1336

Guidance Statements (GSs)

GS 001 Concise Financial Reports Under the Corporations Act 2001 1368

GS 002 Special Considerations in the Audit of Risk Management

Requirements for Registrable Superannuation Entities and Licensees 1387

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

GS 004 Audit Implications of Prudential Reporting Requirements for General Insurers 1428

GS 005 Using the Work of an Actuary 1457

GS 006 Electronic Publication of the Auditor’s Report 1463

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

GS 008 The Auditor’s Report on a Remuneration Report under

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 Meeting 1629

GS 011 Third Party Access to Audit Working Papers 1637

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

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

GS 014 Auditing Mortgage Schemes 1727

GS 015 Audit Implications of Accounting for Investments in Associates 1733

GS 016 Bank Confirmation Requests 1741

GS 017 Prudential Reporting Requirements for Auditors of a Life Company 1763

GS 018 Franchising Code of Conduct – Auditor’s Reports 1793

GS 019 Auditing Fundraising Revenue of Not–for–Profit Entities 1800

GS 020 Special Considerations in Auditing Financial Instruments 1817

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 Standards 1963

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 Prepared in connection with a Disclosure Document 2075

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

APES GN 40 Members in Business Guidance Note Ethical Conflicts in the Workplace — Considerations for Members in Business 2105

Miscellaneous Professional Statements

APS 12 Statement of Financial Advisory Service Standards 2142