Course Content
Develop evaluation plan
This topic covers: 1.1 Obtain and interpret information on organisation’s policies, procedures and compliance requirements 1.2 Develop evaluation methodology 1.3 Prepare evaluation plan, detailing established evaluation criteria and data to be collected 1.4 Confirm approval of plan from relevant stakeholders
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Identifying and gathering evidence
This topic focuses on these three steps: 2.1 Identify sources of information according to audit plan 2.2 Interview relevant stakeholders 2.3 Gather information and documentation
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Exit meeting and performance improvement
4.1 Review, assess, and reach agreement on audit team findings according to audit plan 4.2 Prepare for exit meeting 4.3 Examine results and findings against audit objectives and present to relevant stakeholders 4.4 Confirm reporting arrangements for the quality audit with the auditee 4.5 Explain context and consequences of audit and discuss follow-up 4.6 Review and submit final audit report according to audit plan 5.1 Provide feedback on performance to audit team 5.2 Encourage and support audit team to review their own work 5.3 Provide and document advice for individual improvement
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BSBAUD512 Lead quality audit
About Lesson

In Australia, the primary auditing standards are set by the Auditing and Assurance Standards Board (AUASB). The AUASB is an independent, statutory agency of the Australian Government that develops, issues, and maintains auditing and assurance standards and guidance for auditors. The AUASB’s standards apply to all auditing practitioners in Australia.

Australian Auditing Standards (ASAs)

The Australian Auditing Standards, known as ASAs, are based on the International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB). The ASAs are legally enforceable for all audits of financial reports required under Australian legislation.

Key Standards Include:

  1. ASA 200: Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards
  2. ASA 315: Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment
  3. ASA 330: The Auditor’s Responses to Assessed Risks
  4. ASA 500: Audit Evidence
  5. ASA 501: Audit Evidence—Specific Considerations for Selected Items
  6. ASA 700: Forming an Opinion and Reporting on a Financial Report
  7. ASA 701: Communicating Key Audit Matters in the Independent Auditor’s Report

These standards cover various aspects of an audit, from planning and risk assessment to evidence gathering, reporting, and ethics.

Other Relevant Standards and Guidelines:

  • Australian Standards on Review Engagements (ASREs): Apply to the review of financial statements and other financial information.
  • Australian Standards on Assurance Engagements (ASAEs): Apply to assurance engagements other than audits or reviews of historical financial information.
  • Australian Standards on Related Services (ASRSs): Apply to a broad range of assurance and related services engagements.

Regulatory and Professional Bodies:

In addition to the AUASB, other bodies play significant roles in the auditing profession in Australia, including:

  • Australian Securities and Investments Commission (ASIC): ASIC regulates company and financial services and enforces laws to protect Australian consumers, investors, and creditors.
  • CPA Australia and Chartered Accountants Australia and New Zealand (CA ANZ): These are professional accounting bodies that provide training, set ethical standards, and enforce compliance among their members.

Compliance with these standards ensures that audits are performed to a high level of quality, integrity, and professionalism, which in turn helps to maintain confidence in Australia’s financial markets and reporting practices.

Detailed summary of the key standards mentioned above

The key Australian Auditing Standards (ASAs) outline specific responsibilities for auditors. Here’s a summary of the auditor’s responsibilities under each of the mentioned standards:

  1. ASA 200 – Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards:

    • The auditor must comply with all ethical requirements, including independence.
    • The auditor is responsible for obtaining reasonable assurance that the financial report as a whole is free from material misstatement, whether due to fraud or error, enabling the auditor to express an opinion on the financial report.
    • The auditor must plan and perform the audit with professional skepticism, recognizing the possibility that material misstatements may exist, regardless of the auditor’s past experience with the entity.
  2. ASA 315 – Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment:

    • The auditor’s responsibility is to identify and assess the risks of material misstatement in the financial report, whether due to fraud or error, by understanding the entity and its environment, including the entity’s internal control.
    • The auditor must perform risk assessment procedures to gather sufficient appropriate audit evidence.
  3. ASA 330 – The Auditor’s Responses to Assessed Risks:

    • Based on the assessed risks, the auditor is responsible for designing and implementing appropriate responses to address these risks.
    • The auditor must determine overall responses to address risks at the financial statement level and design and perform further audit procedures at the assertion level.
  4. ASA 500 – Audit Evidence:

    • The auditor must design and perform audit procedures to obtain sufficient appropriate audit evidence to be able to draw reasonable conclusions on which to base the auditor’s opinion.
    • The standard sets out the quantity and quality of audit evidence the auditor needs to gather.
  5. ASA 501 – Audit Evidence—Specific Considerations for Selected Items:

    • This standard deals with specific considerations by the auditor regarding obtaining sufficient appropriate audit evidence for certain aspects of the financial report, such as inventory, litigation and claims involving the entity, and segment information.
  6. ASA 700 – Forming an Opinion and Reporting on a Financial Report:

    • The auditor’s responsibility is to form an opinion on the financial report based on the audit evidence obtained and to express clearly that opinion through a written report.
    • The auditor must ensure that the opinion is appropriately formed in accordance with the findings of the audit and that the report complies with ASA requirements.
  7. ASA 701 – Communicating Key Audit Matters in the Independent Auditor’s Report:

    • The auditor is responsible for communicating key audit matters in the auditor’s report, which are those matters that were of most significance in the audit of the financial report.
    • The auditor must describe each key audit matter, how it was addressed in the audit, and refer to the relevant disclosures in the financial report.