A member wonders when standards issued by the AUASB are applicable.
Q: Are the auditing and assurance standards issued by the Auditing and Assurance Standards Board (AUASB) mandatory in relation to the audit of non-corporations law bodies such as incorporated associations and partnerships?
A: The Australian auditing and assurance standards issued by the AUASB have 'the force of law' under the Corporations Act 2001.
The context of this force of law concept applies to the audit of companies, registered schemes and disclosing entities in accordance with Chapter 2M, or financial services licensees in accordance with Chapter 7, of the Corporations Act 2001.
For audits of other bodies, the standards issued by the AUASB do not have the force of law.
If an audit is required of an entity by other legislation or state-based legislation, and the Corporations Act 2001 does not apply, the legislation generally does not specifically refer to the standards issued by the AUASB.
The Accounting Professional & Ethical Standards Board Limited (APESB) is an independent body that sets the code of ethics and the professional standards that members of CPA Australia, the Institute of Chartered Accountants in Australia and the National Institute of Accountants are required to abide by.
Members of those bodies are required by APES 410 Conformity with auditing and assurance standards to apply the legally backed Australian auditing and assurance standards issued by the AUASB when performing an audit engagement.
Where the audit of entities is subject to state-based legislation, audit requirements differ between the states and territories, as do statutory benchmarks that demarcate the different sizes of associations.
In most instances, state-based legislation requires the audit or review to be undertaken by a member of a professional accounting body, who is required by APES 410 to apply the AUASB auditing and assurance standards.
Governance and accountability mechanisms in non-corporations law bodies such as partnerships, are legally determined by their partnership agreement or constitution. In some circumstances, a requirement for an audit may be established by a stakeholder party, for example as a condition of a government grant.
For audits arising in either of these ways, a member of a professional accounting body performing the audit must comply with APES 410 and apply AUASB-issued auditing and assurance standards.
Answered by John Ngiam CPA, CPA Australias financial reporting and governance policy adviser.
