Detailed Analysis of ASA 220 for Auditing and Assurance (ACCM4400)

This report provides a comprehensive overview of ASA 220, focusing on quality control for audits of financial reports and other historical financial information in Australia. The report details the standard's objectives, which include establishing leadership accountability, defining ethical requirements, and setting processes for client acceptance, engagement performance, and quality control monitoring. It highlights the evolution of ASA 220, noting its revisions and amendments by the AUASB to align with international auditing standards and ensure the protection of stakeholders. The report explains the standard's key components, such as engagement deliverables, team assignments, and documentation needs, and its relationship with other auditing standards like ASA 101 and ASA 200. The report also includes a table illustrating the timeline of ASA 220's revisions and effective dates, emphasizing the continuous efforts to adapt the standard to meet evolving auditing practices and international requirements, ensuring clarity and prudence in financial reporting.

Auditing and Assurance in Australia
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Table of Contents
Introduction.................................................................................................................................................3
ASA 220.......................................................................................................................................................3
Explanatory Statement- ASA 220.................................................................................................................4
ASA 220- A brief compilation details...........................................................................................................5
Conclusion...................................................................................................................................................5
Bibliography................................................................................................................................................7
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Introduction
Australian Auditing and Assurance Standard Board is in the continuous process to amend its
different standards and regulations to follow international standard of auditing and assurance in
order to ensure prudence to the stakeholders as per global standard. The authority named
Auditing and Assurance Standard Board, Australia has issued different standards under the
supervision of Federal Register of Legislation, Australian Government. The Auditing Standard,
ASA 220 is the subject of discussion for this article. As a part of continuous changing process,
this standard is also passing through different changes as per requirement generated by this
curriculum of auditing in Australia. (leAccountant, 2016)
ASA 220
As per the requirement of the strategic roadmap provided by the Financial Reporting Council
(FRC) to AUASB, the later has to ensure a program as per the guideline set by International
Auditing and Assurance Standards Board (IAASB) for Australia to revise and enhance the global
standards on auditing as per International Auditing Standards. This step would ensure
compliance as set by ISA to ensure proper required changes to the Australian Auditing
Standards. This is a continuous process by the Australian authority following adaptation of the
program to amend and revise the standards to ensure clarity and prudence to the stakeholders to
be at par with the equivalent ISAs. (Board, 2009)
This standard ASA 220 is mainly emphasizes on the issue of quality management and respective
control of specific audit of a financial report along with other Historical Financial Information
connected to the demands of the provision enforced by legislative authorities with proper
roadmap of Strategic Direction.
AUASB, with the identity of independent statutory authority of the Australian Government, was
enforced under section 227A of the Australian Securities and Investments Commission Act
2001as per amendments required and known as ASIC Act. The AUASB has the power to make
and amend the Auditing Standards for ensuring corporations legislation under section 336 of the
Corporation Act 2001. These braces of Auditing Standards are considered as the legislative
instruments under the Legislative Instruments Act, 2003.
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Explanatory Statement- ASA 220
This standard is related to the process of quality control for audits of historical financial
information and financial report along with the engagement of reviewing process to ensure
quality control as per requirement. Basic features of this auditing standard are:
1) Establishment of leadership accountability of the concerned operational stakeholders for
quality of the said audits;
2) Description of related ethical needs;
3) Setting out the process for accepting and continuing of relationships with clients and
engagement of audit assignments;
4) Fixation of engagement deliverance requirements;
5) Fixation of the assignment of the audit team related to the audit assignment;
6) Fixation of needs of the engagement deliverables covering the direction, reviews,
supervision, and consultation to ensure quality control for the assignment;
7) Clarification of the process to monitor the compliance objective as per the system of
quality control;
8) Preparation of the documentation needs as demanded to ensure quality management for
the audit assignment, including the scope of quality control reviewer to perform for best
possible result deliverable for the assignment.
The initial and macro objectives of ASA 220 is to be considered in relation to ASA 101
Preamble to Australian Auditing Standards, which fixes with direction to the intent of the
AUASB to make the stakeholders understand, interpret and apply about the operative financial
reporting tenures starting on or after 1st January, 2010. ASA 220 is to be studied, understood and
applied in relation to ASA 200 ‘Overall Objectives of the Independent Auditor’ along with the
‘Conduct of an Audit in Accordance with Australian Auditing Standards’. (Legislation, 2009)
The processes of establishing Australian Auditing Standards are set as per the strategic roadmap
of AUASB to comply with the International Auditing Standards with the objective of
safeguarding the public interest in the possible highest quality by following the IAS guideline as
set by IAASB and as applicable for Australian regulatory environment with subject to
enforcement of those standards. (Board, 2013)
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ASA 220- A brief compilation details
From the above discussion, it is evident that ASA 220 had replaced Auditing Standard ASA
200. The replacement of erstwhile standard was done in 2009 by AUASB. After then, this
standard has passed through different amendments and additions to comply with practical
implication and international requirement of auditing standard by Australian Government. The
below table will feature the transition process with specific date of incorporation by AUASB.
The standard was renamed from time to time as per the regulatory authority with specific date of
commencement. (Legislation, 2017) (Jade, 2017)
Standard Date of establishment Operative date
ASA 220 27th October, 2009 Financial reporting period
starting on or after 1st January
2010
AASA 2011-1 (Board, 2011) 27th June, 2011 Financial Period starting on or
after 1st July, 2011
ASA 2013-2 11th November,2013 Financial period starting on or
after 1st January, 2014
ASA 2015-1 1St December, 2015 Financial period concluding
on or after 15th December,
2016
ASA 2017-2 30th May, 2017 Financial period starting on or
after 1st January, 2018
From the above table, it is evident that the transition of this standard ASA 220 is done by
AUASB from time to time as per the requirement of International Standard of Auditing (ISA).
The latest compilation is done on 30th may 2017 with effective date of following the standard as
1st January, 2018.
Conclusion
ASA 220 is the auditing standard set by AUASB as per the international guideline set by IAS.
The subject line of Quality Control for an audit of a financial report and other historical financial
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information is acknowledged by setting this standard with time-to-time amendment of the
standard to ensure the interest of the domestic as well as global stakeholders. Main objective is to
follow a standardized global format to enable the global stakeholders following the auditing
process for better understanding the process of audit operation. It is observed that this standard
setting is not stagnant process. That is why, the regulatory body is pursuing continuous research
on this subject and amend the same standard ASA 220 to enable the standard provide best
possible and logical result as per latest trend of global auditing.
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Bibliography
Board, A.a.A.S., 2009. Explanatory Statement: ASA 220 Quality Control for an Audit of a Financial Report
and Other Historical Financial Information. [Online] Available at:
https://www.auasb.gov.au/admin/file/content102/c3/ES_ASA_220_27-10-09.pdf [Accessed 10
September 2019].
Board, A.a.A.S., 2011. Compiled Auditing Standard ASA 220. [Online] Available at:
https://www.comlaw.gov.au/Details/F2011C00630/e5b2476d-6ced-4471-ac6a-8a30f2192cd8 [Accessed
10 September 2019].
Board, A.a.A.S., 2013. Complied Auditing Standrds ASA220. [Online] Available at:
https://www.auasb.gov.au/admin/file/content102/c3/Nov13_Compiled_Auditing_Standard_ASA_220.p
df [Accessed 10 September 2019].
Jade, 2017. ASA 220 - Quality Control for an Audit of a Financial Report and Other Historical Financial
Information - October 2009 (Cth). [Online] Available at: https://jade.io/j/?a=outline&id=548763
[Accessed 10 September 2019].
leAccountant, 2016. Australian Auditing Standards Summaries. [Online] Available at:
http://leaccountant.com/auditing-standards-summaries/australian-auditing-standards-asa-summaries/
[Accessed 10 September 2019].
Legislation, F.R.o., 2009. Auditing Standard ASA 220 Quality Control for an Audit of a Financial Report
and Other Historical Financial Information. [Online] Available at:
https://www.legislation.gov.au/Details/F2009L04066 [Accessed 10 September 2019].
Legislation, F.r.o., 2017. Compiled Auditing Standard: ASA 220. [Online] (4) Available at:
https://www.legislation.gov.au/Details/F2017C00908 [Accessed 10 September 2019].
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