On 1 May 2006, the Auditing and Assurance Standards Board (AUASB) issued 35 new legally enforceable Australian Auditing Standards (ASAs), following a review of the existing auditing standards. The ASAs are legislative instruments under the Legislative Instruments Act 2003.
As the new statutory body, the AUASB has been granted powers by Section 227B of the ASIC Act 2001 to make auditing standards for purposes of Section 336 of the Corporations Act 2001, auditing and assurance standards for other purposes as well as guidance on auditing and assurance-related matters.
In line with the Financial Reporting Councils strategic directions, the AUASB uses International Standards on Auditing (ISAs) issued by the International Auditing and Assurance Standards Board (IAASB) as the basis from which the ASAs are developed. The ASAs apply to all audits conducted under the Corporations Act 2001 for reporting periods commencing on or after 1 July 2006, and are intended to apply to any provider of auditing services.
CPA Australia was heavily involved in the development of the legally enforceable auditing standards. On behalf of members, CPA Australia submitted to the AUASB on all its exposure drafts of proposed auditing standards. The submissions highlight important issues relating to the proposed new legally enforceable auditing standards and are important to ensure members' views and concerns are advocated and heard by the AUASB.
The IAASB has recently been redrafting ISAs in a clarity format. This involves redrafting standards to ensure that they are high quality standards that are understandable, clear and capable of consistent application. An aim of the clarity project is to enhance the quality and uniformity of practice worldwide.
In line with the strategic direction provided by the Financial Reporting Council, the AUASB is revising ASAs in clarity format. Final approved, revised standards will be issued when all standards are approved. This is expected to occur by October 2009, and will be operative on 1 January 2010. Information about the AUASB's redrafting project can be found at the AUASB website.
As well as issuing auditing standards, the AUASB has issued standards on review engagements and assurance engagements, and guidance statements to assist auditors in the performance of their duties on specific topics. Other standards and guidance statements are available in the Members' Handbook.
