Making Auditing Standards
Framework

Output to 30 June 2005

Foreword to Auditing Standards

Standards

Drafting commenced

GROUP 1

AUS 202 Objectives and General Principles
Governing an Audit of a Financial Report

Drafting near completion.
Issue of ED delayed.

AUS 402 Understanding the Entity and its Environment and
Assessing the Risks of Material Misstatements

Drafting near completion.
Issue of ED pending.

AUS 406 The Auditor’s Procedures In Response to Assessed Risks

Drafting near completion.
Issue of ED pending.

AUS 502 Audit Evidence

Drafting near completion.
Issue of ED pending.

AUS 504 External Confirmations

Drafting near completion.
Issue of ED pending.

AUS 506 Existence and Valuation of Inventory

Drafting near completion.
Issue of ED pending

AUS 508 Inquiry Regarding Litigation and Claims

Drafting near completion.
Issue of ED delayed.

AUS 520 Management Representations

Drafting commenced

GROUP 2

AUS 204 Terms of Audit Engagements

Drafting commenced

AUS 206 Quality Control for Audits of
Historical Financial Information

Drafting commenced

AUS 208 & AGS 1038 Documentation

Drafting not commenced

AUS 302 Planning

Drafting commenced

GROUP 3

AUS 210 The Auditor’s Responsibility to Consider
Fraud and Error in an Audit of a Financial Report

Drafting commenced

AUS 218 Consideration of Laws and Regulations
in an Audit of a Financial Report

Drafting not commenced

AUS 710 Communicating with Management on
Matters Arising from an Audit

Drafting not commenced

GROUP 4

AUS 212 Other Information in Documents Containing Audited Financial Reports

Drafting commenced

AUS 702 & AGS 1066 The Audit Report on a General Purpose Financial Report

Drafting not commenced

AUS 706 Subsequent Events

AUS 708 & AGS 1028 Going concern

Drafting commenced

Drafting not commenced

AUS 802 & AGS 1044 The Audit Report on Financial Information Other than a General Purpose Financial Report

Drafting not commenced

GROUP 5

AUS 510 Initial Engagements — Opening Balances

Drafting not commenced

AUS 518 Related Parties

Drafting not commenced

AUS 704 Comparatives

Drafting not commenced

AUS 902 AGS 1016 Review of Financial Reports

Drafting not commenced

GROUP 6

AUS 404 Audit Implications Relating to Entities Using a Service Entity

Drafting not commenced

AUS 522 & AGS 1026 Audit Evidence Implications of Externally Managed Assets of Superannuation, Provident or Similar Funds

Drafting not commenced

AUS 524 The Auditor’s Use of the Work of the Actuary and the Actuary’s Use of the Work of the Auditor in Connection with the Preparation and Audit of a Financial Report

Drafting not commenced

AUS 602 Using the Work of Another Auditor (Group audits)

Drafting not commenced

AUS 604 Considering the Work of Internal Auditing

Drafting not commenced

AUS 606 Using the Work of an Expert

Drafting not commenced

GROUP 7

AUS 512 Analytical Procedures

Drafting not commenced

AUS 514 Audit Sampling and Other Selective Testing Procedures

Drafting not commenced

GROUP 8

AUS 516 Audit of Accounting Estimates

Drafting not commenced

AUS 306 Materiality and Audit Adjustments

Drafting not commenced

AUS 526 Auditing Fair Value Measurements and Disclosures

Drafting not commenced

GROUP 9

AUS 104 Glossary of Terms

Drafting not commenced

Projects

Develop Business Plan to meet FRC’s Strategic Direction

Develop Project Plan, including drafting protocols and work programme, for the re-issue of Auditing Standards as legislative instruments (CLERP 9).

Completed

Completed

International

International Auditing and Assurance Standards Board (IAASB):

• Preparation and attendance at meetings
• Commentary on exposure drafts

• 4 meetings attended
• Responses given on 2 EDs, Materiality and Accounting Estimated

Royal NIVRA:
Commentary on EDs

Responses given on 2 EDs, Assurance Engagements Relating to Sustainability Reports and Practitioners Working with Subject Matter Experts from Other Disciplines on Non- Financial Assurance Engagements.

IAASB Clarity Project

AUASB is consulted by, and provides submissions to, the Clarity Task Force regarding proposals to re-draft International Standards on Auditing (ISAs).

Review of Standards not included in legislative instruments group

Reviews commenced on both Compliance and Performance auditing.

Reporting under Investor Directed Portfolio Service class orders

Working party ongoing. Awaiting ASIC input to proposals.

Auditing Guidance Statement

• New guidance
• Revision of AGS 1038 – Access to Working Papers

AGS 1068 Audit Requirements for Australian Financial Services Licensees under the Corporations Act 2001 issued October 2004.

Project working party near to finalising revisions to the AGS.

Audit and Assurance Alert

AAA 14 The Implications for Auditors on the Transition to Australian Equivalents to IFRS issued October 2004.

APRA

AUASB consulted on reporting in regard to Superannuation Audit and Review Reports for Risk Management Strategies and Risk Management Plans. Final reports issued by APRA June 2005.

Academic Research

• Quarterly reports
• AUASB commissioned research into the impact that proposed changes to wording of Audit Reports have on users’ perceptions. Research report by UNSW and ANU published December 2004.
• Research Committee Charter ready for approval at the July 2005 Board Meeting

Reports for all Board meetings.

Monitoring the activities of Other Standard Setters

Development of an AUASB Communications Strategy

External consultant appointed. Strategic plan commenced.

Project

Status

Project description

Review and reissue of Auditing Standards (by 31 March 2006)

In progress

• Reviewing and reissuing Auditing Standards as Legislative Instruments using ISAs as a base;
• developing a communication plan specific to this project;
• restructuring the audit framework.

IAASB Projects

Ongoing

• monitoring the activities of the IAASB including the progress of the IAASB Clarity Project;
• providing comment on IAASB outputs (such as Exposure Drafts);
• Attendance at IAASB meetings;
• staff briefings to the AUASB on IAASB meeting papers.

Project

Status

Project description

Communications strategy

In progress

• Finalisation of a Communications Strategy;
• developing and ongoing maintenance of the AUASB web site;
• liaising with regulators, constituents and media groups.

Review and reissue of other auditing standards (not issued as legislative instruments) and guidance statements

To commence in 2006

• reviewing and reissuing other auditing standards and guidance statements (liaising with working parties and experts where appropriate);
• developing and issuing new auditing standards or guidance statements (for example, compliance auditing).

Monitoring of other international standard setters

Ongoing

• monitoring and reviewing the activities of other international standard setting bodies, including the PCAOB, and subsequent reporting to the Board.

Monitoring auditing research undertaken in Australia and internationally

Ongoing

• establishing a Research Committee;
• monitoring auditing research undertaken in Australia and internationally;
• facilitating auditing research in Australia in order to maximise funding opportunities for auditing research that are of interest to an impact on the AUASB work plan.

Other ad hoc projects

Ongoing

• participating in and responding to developments or changes initiated by regulators (for example, ASIC and APRA).