Federal Register of Legislation - Australian Government

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ASA 600 Standards/Accounting & Auditing as made
This instrument is the Auditing Standard ASA 600 concerning Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors).
Administered by: Treasury
Exempt from sunsetting by the Legislation (Exemptions and Other Matters) Regulation 2015 s12 item 18
Registered 18 May 2022
Tabling HistoryDate
Tabled HR26-Jul-2022
Tabled Senate26-Jul-2022

 

 

ASA 600

(May 2022)

Explanatory Statement

ASA 600 Special Considerations —Audits of a Group Financial Report (Including the Work of Component Auditors)  and ASA 2022-1 Amendments to Australian Auditing Standards

Issued by the Auditing and Assurance Standards Board

Title: Logo of the Auditing and Assurance Standards Board - Description: Australian crest, with text naming the Australian Government and 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

Auditing and Assurance Standards Board

Podium Level 14, 530 Collins Street

Melbourne   Victoria   3000

AUSTRALIA

Phone:  (03) 8080 7400

E-mail: enquiries@auasb.gov.au

Postal Address:

PO Box 204, Collins Street West

Melbourne   Victoria   8007

AUSTRALIA


 

Reasons for Issuing Auditing Standard ASA 600 Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors) and ASA 2022-1 Amendments to Australian Auditing Standards

The AUASB issues Auditing Standard ASA 600 Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors) and ASA 2022-1 Amendments to Australian Auditing Standards 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.

The Auditing Standard conforms with ISA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors) and the IAASB’s Conforming Amendments to ISAs and Related Material Arising from the Group Audit standard.

Purpose of Auditing Standard ASA 600 Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors) and ASA 2022-1 Amendments to Australian Auditing Standards

The purpose of the Auditing Standard represents the Australian equivalent of ISA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)  and will replace the current ASA 600 Special Considerations-Audits of a Group Financial Report by the AUASB in June 2020 (as amended). ASA 2022-1 Amendments to Australian Auditing Standards includes the consequential and conforming amendments to other Auditing Standards as a result of changes to ASA 600.

Main Features

ASA 600 strengthen the auditor’s approach to planning and performing a group audit and clarifies the interaction of ISA 600 to the other ISAs by

·                     Keeping the Group Audit standard fit for purpose;

·                     Encouraging proactive management of quality at the engagement level;

·                     Fostering an appropriately independent and challenging sceptical mindset of the auditor; and

·                     Reinforcing the need for robust communication and interactions during the audit

Operative Date

Operative date for audits of a group financial report for periods beginning on or after 15 December 2023, with early adoption being permitted and encouraged.

 

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, as appropriate, the text of the International Standards on Auditing (ISAs) of the International Auditing and Assurance Standards Board (IAASB) as a base from which to develop Australian Auditing Standards;

·                    make amendments to ISAs as necessary to conform with the Australian regulatory environment and statutory requirements; and

·                    are capable of enforcement.

Consultation Process prior to issuing the Auditing Standard

The AUASB has consulted publicly as part of its due process in developing the Auditing Standard, by exposing the international ED-ISA 600, along with an associated Australian Explanatory Memorandum.  ED-ISA 600 was exposed within Australia with a 80 day comment period.

Submissions were received by the AUASB and these were considered as part of the development and finalisation of the Auditing Standard.

Regulatory Impact Statement

A Regulatory Impact Statement (RIA) has been prepared in connection with the preparation of ASA 600 Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors).  The RIA has been cleared by the Office of Best Practice Regulation (OBPR).

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Legislative Instrument:         Auditing Standard ASA 600 Special Considerations—Audits of a Group Financial Report (Including the Work of Component Auditors) and ASA 2022-1 Amendments to Australian Auditing Standards

These Legislative Instruments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

Background

The AUASB is an independent statutory committee 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 Legislative Instruments Act 2003.

Purpose of Auditing Standard ASA 600

The purpose of the Auditing Standard represents the Australian equivalent of ISA 600 Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)  and will replace the current ASA 600 Special Considerations-Audits of a Group Financial Report by the AUASB in June 2020 (as amended). ASA 2022-1 Amendments to Australian Auditing Standards includes the consequential and conforming amendments to other Auditing Standards as a result of changes to ASA 600.

Main Features

ASA 600 strengthen the auditor’s approach to planning and performing a group audit and clarifies the interaction of ISA 600 to the other ISAs by

·                     Keeping the Group Audit standard fit for purpose;

·                     Encouraging proactive management of quality at the engagement level;

·                     Fostering an appropriately independent and challenging sceptical mindset of the auditor; and

·                     Reinforcing the need for robust communication and interactions during the audit.

Human Rights Implications

These Auditing Standards are issued by the AUASB in furtherance of the objective of facilitating the Australian economy. The standards do not diminish or limit any of the applicable human rights or freedoms, and thus do not raise any human rights issues.

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.