Federal Register of Legislation - Australian Government

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ASA 300 Standards/Accounting & Auditing as made
Auditing Standard ASA 300 establishes mandatory requirements and provides explanatory guidance on the considerations and activities applicable to planning an audit of a financial report.
Administered by: Treasury
General Comments: This Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.
Exempt from sunsetting by the Legislation (Exemptions and Other Matters) Regulation 2015 s12 item 18
Registered 12 May 2006
Tabling HistoryDate
Tabled HR22-May-2006
Tabled Senate13-Jun-2006
Date of repeal 26 Nov 2020
Repealed by AUASB Repeal of Superseded Auditing Standards 2020
Table of contents.


                                                                                       (April 2006)

 

 

 

 

Explanatory Statement

 

ASA 300 Planning an Audit of a Financial Report

 

 

Issued by the Auditing and Assurance Standards Board

 


Explanatory Statement

Reasons for Issuing ASA 300 Planning an Audit of a Financial Report

The Auditing and Assurance Standards Board (AUASB) issues Auditing Standard ASA 300 Planning an Audit of a Financial Report due to the requirements of the legislative provisions explained below.

The Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 established the AUASB as an independent statutory body under section 227A of the Australian Securities and Investments Commission Act 2001, as from 1 July 2004. 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 Legislative Instruments Act 2003.

Process of making Auditing Standards

Section 1455 of the Corporations Act 2001 and Corporations Regulation 10.5.01 gave interim legal endorsement from 1 July 2004 to the majority of Auditing Standards made by the former Auditing & Assurance Standards Board of the Australian Accounting Research Foundation. The AUASB has reviewed the Auditing Standards and has proceeded to make them as legally enforceable Auditing Standards under the Corporations Act 2001.

The Auditing Standards have been made also in accordance with the Financial Reporting Council’s Strategic Direction to the AUASB dated 6 April 2005, pursuant to section 225 of the ASIC Act.

The Strategic Direction, inter alia, provides that the AUASB develops 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 a base;

·                    conform with the Australian regulatory environment; and

·                    are capable of enforcement.

In implementing the Strategic Direction, the AUASB has undertaken a process of thorough review and revision that has:

·                     addressed the enforceability of mandatory requirements;

·                     clarified auditors’ obligations under the Auditing Standards;

·                     provided for sector neutrality in the Auditing Standards; and

·                     included other amendments as necessary.

Purpose of Auditing Standard ASA 300 Planning an Audit of a Financial Report

The purpose of Auditing Standard ASA 300 is to establish mandatory requirements and to provide explanatory guidance on the considerations and activities applicable to planning an audit of a financial report. This Auditing Standard is framed in the context of recurring audits. In addition, matters that the auditor is required to perform in initial audit engagements are included in paragraph 31.

Auditing Standard ASA 300 is to be read in conjunction with the Preamble to AUASB Standards, which sets out the intentions of the AUASB on how the Auditing Standards are to be understood, interpreted and applied.

Operative Date

This Auditing Standard is operative for financial reporting periods commencing on or after 1 July 2006.

Main changes from Auditing Standard AUS 302 (October 1995) Planning

The main differences between ASA 300 and AUS 302 are that in ASA 300:

1.                  The word ‘shall’, in the bold-type paragraphs, is the terminology used to describe an auditor’s mandatory requirements, whereas an auditor’s degree of responsibility is described in AUS 302 by the word ‘should’.

2.                  The explanatory guidance paragraphs provide guidance and illustrative examples to assist the auditor in fulfilling the mandatory requirements, whereas in AUS 302 some obligations are implied within certain explanatory paragraphs. Accordingly, such paragraphs have been redrafted to clarify that the matter forms part of the explanatory guidance.

3.                  Additional mandatory requirements, which are not in AUS 302, have been included. Under this Auditing Standard the auditor is required to:

(i)         perform various preliminary engagement activities at the commencement of the audit engagement, including evaluating the auditor’s independence (paragraph 9);

(ii)        establish an overall audit strategy, setting out the scope, timing and direction of the audit as a guide to the development of the more detailed audit plan (paragraph 12);

(iii)       develop an audit plan for the audit in order to reduce audit risk to an acceptably low level (paragraph 18);

(iv)       update the overall audit strategy and the audit plan for any changes as necessary during the course of the audit (paragraph 21);

(v)        plan the nature, timing and extent of direction and supervision of the audit engagement team members and review of their work (paragraph 23); and

(vi)       perform various procedures prior to starting an initial audit assignment (paragraph 31).

Consultation prior to issuing this Auditing Standard

The AUASB has consulted publicly as part of its due process in developing this Auditing Standard. Exposure Draft ED 15/05 Proposed Auditing Standard: Planning an Audit of a Financial Report (Re-issuance of AUS 302) was issued on 28 October 2005 with a 45 day comment period. Submissions were received by the AUASB and it has considered these submissions as part of the development and finalisation of this Auditing Standard.