Comply with Australian Auditing Standards (ASA)
Auditors must conduct audits per ASA — Aus equivalent of ISA, with Aus additions.
Who must comply
Individual auditors, audit firms (through the lead auditor) and authorised audit companies conducting an audit or review of a financial report under Part 2M.3 of the Corporations Act. The duty in s 307A(1) sits on the individual auditor or audit company conducting the audit; where an audit firm or audit company conducts it, s 307A(2) also makes the lead auditor responsible.
What triggers it
Accepting and conducting an audit or review of an annual or half-year financial report required by the Corporations Act.
When due
Throughout every audit or review engagement, applying the auditing standards in force for the reporting period (a standard applies to periods ending after it commences, or from a later date it specifies).
Evidence required
Audit file documenting planning, risk assessment, evidence and conclusions under the ASAs; engagement letter; auditor's independence declaration and independence assessment; quality management documentation; lead auditor review and sign-off; auditor's report in the form the standards require.
Max penalty
Contravening s 307A(1) or (2) is an offence: the fault-based offence carries up to 2 years imprisonment (s 307A(3)) and the strict liability offence 50 penalty units, $18,200 (s 307A(4)) (Corporations Act Schedule 3). ASIC can also take enforcement action where its audit oversight identifies significant non-compliance
Who must comply with this? The applicability test by industry, business structure and size.
Summary
Section 307A of the Corporations Act 2001 requires an individual auditor or audit company that audits or reviews an annual or half-year financial report to conduct the audit or review in accordance with the auditing standards; where an audit firm or audit company is engaged, the lead auditor must ensure this. The auditing standards are made by the Auditing and Assurance Standards Board (AUASB) as legislative instruments under s 336, and have been legally enforceable since July 2006. The Australian Auditing Standards (ASAs) set the auditor's responsibilities for audits of financial reports and other historical financial information; separate AUASB standards cover review engagements, other assurance engagements, related services and, now, sustainability assurance (s 307AB for Corporations Act sustainability reports). ASIC administers audit quality and auditor independence and runs audit inspection and surveillance programs.
Enforced by
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Frequently asked questions
- Who must comply with Australian Auditing Standards (ASA)?
- Individual auditors, audit firms (through the lead auditor) and authorised audit companies conducting an audit or review of a financial report under Part 2M.3 of the Corporations Act. The duty in s 307A(1) sits on the individual auditor or audit company conducting the audit; where an audit firm or audit company conducts it, s 307A(2) also makes the lead auditor responsible.
- What triggers Australian Auditing Standards (ASA)?
- Accepting and conducting an audit or review of an annual or half-year financial report required by the Corporations Act.
- When is Australian Auditing Standards (ASA) due?
- Throughout every audit or review engagement, applying the auditing standards in force for the reporting period (a standard applies to periods ending after it commences, or from a later date it specifies).
- What is the maximum penalty for Australian Auditing Standards (ASA)?
- Contravening s 307A(1) or (2) is an offence: the fault-based offence carries up to 2 years imprisonment (s 307A(3)) and the strict liability offence 50 penalty units, $18,200 (s 307A(4)) (Corporations Act Schedule 3). ASIC can also take enforcement action where its audit oversight identifies significant non-compliance
- What evidence is required for Australian Auditing Standards (ASA)?
- Audit file documenting planning, risk assessment, evidence and conclusions under the ASAs; engagement letter; auditor's independence declaration and independence assessment; quality management documentation; lead auditor review and sign-off; auditor's report in the form the standards require.
Source: https://www.auasb.gov.au/standards-guidance/auasb-standards/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.