Auditing in Australia: Regulations, Auditors, and Financial Statements

This report examines the Australian regulatory environment for auditors, focusing on the Auditing and Assurance Standards Board (AUASB) and its influence on auditing practices. It identifies key Australian auditing standards (ASA) and regulations that impact auditors' work in relation to financial statements, including ASA 200, ASA 315, ASA 705, ASA 700, ASA 800, ASA 230, ASA 260, and ASA 701. The report discusses the role of regulators like AUASB, CPA Australia, and ICAA in setting and monitoring these standards to ensure audit quality and ethical conduct. It highlights how these regulations guide auditors, promote professional training, and enhance the reliability of audit reports for stakeholders. The report emphasizes the positive impact of the AUASB in providing guidance, ensuring ethical behavior, and improving auditors' performance by applying efficient auditing standards and monitoring these standards. The report also references relevant sources like the AUASB website and Australian legislation, and a textbook on auditing practices.

Running Head: Auditing
AUDITING

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Australian regulators and regulations that impact on the work of auditors in relation to
auditing the financial statements and the environment in which they operate and are held
accountable
In this study, the official site of Auditing and Assurance Standards Board is selected. The
two selected topics from the official site of Auditing and Assurance Standards Board by
considering which this study is conducted are Auditing Standards and Audit Quality
(auasb.gov.au, 2018). The Australian regulators responsible for influencing auditors and their
work in relation to auditing financial statements are Auditing and Assurance Standard Board
(AUASB), CPA Australia, ICAA (Institute of Chartered Accountants Australia) and Accounting
Professional and Ethical Standards Board. Some of the auditing regulations or standards that
impact on auditors’ work on the companies’ financial statements and the environment in which
they use to operate and held accountable for are as follows –
 Auditing Standard ASA 200 - Objectives of an Independent Auditor and the
Conduct of an Audit according to Australian Auditing Standards
 Auditing Standard ASA 315 - Identifying and Assessing the Risks of Material
Misstatement through Understanding the Entity and Its Environment
 Auditing Standard ASA 705 - Modifications to the Opinion in the Independent
Auditor’s Report
 Auditing Standard ASA 700 and ASA 800
 Auditing Standard ASA 230 - Audit Documentation
 Auditing Standard ASA 260 - Communication with Those Charged with
Governance
 ASA 701 - Communicating Key Audit Matters in the Independent Auditor’s
Report (legislation.gov.au, 2018).
Impact of the regulator on application or monitoring of auditing standards or ethical
obligations for auditors
In Australia, the regulators of auditors and their auditing work assist the auditors to work
in an appropriate manner without providing any kind of harm to any of the people associated

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with the audit result. The Auditing and Assurance Standard Board (AUASB) uses to set and
allow an auditor to issue his/her own and unqualified opinion even if the auditor found that the
internal controls of the organisation are not well functioning or even non-existent. The auditing
standards prepared and imposed by the regulators of auditors in Australia are related to the
auditors having proper professional training and are capable of conducting accurate and reliable
audit work on a company’s financial statements. AUASB prepares auditing standards to guide
auditors throughout their auditing work. AUASB uses to formulate standards of auditing and
assurance service and guidance to ensure the highest quality auditing service to the audit clients
as well as to focus on public interest. The auditing standard setting board (AUASB) impacts the
auditors and their audit work in a positive manner as it provides guidance to the auditors and
assists them to act ethically.
The AUASB has framed a number of Australian Auditing Standards and over the times it
has also amended some of the standards as per requirements for establishing the requirements
and providing the application as well as some other material explanatory in nature on –
 the auditor’s responsibilities when engaged for undertaking an audit of a company’s
financial report, or historical financial data and information or of its financial statements,
and
 the content and form of an auditor’s report
This regulator has formulated a set of Auditing Standards u/s 336 of the Corporations Act
2001 for enhancing the quality of auditor’s auditing work (auasb.gov.au, 2018). AUASB has
provided a number of standards on the assurance engagement. These standards use to establish
the requirements as well as provide application along with other explanatory materials required
for undertaking and reporting on the assurance engagements other than historical financial
information audits. All the assurance engagement standards assist auditors to prepare reports on
assurance engagement other than the audits of historical financial information of an auditee
company as covered by the Australian Auditing Standards or the Standards on Review
Engagements (auasb.gov.au, 2018).

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In Australia, the auditors’ and their auditing work regulatory boards like AUASB uses to
frame and apply all kinds of auditing related standards and regulations to guide auditors to
prepare a most reliable and accurate audit of the financial statements of the Australian
companies. For applying auditing standards and ethical regulations, AUASB act as the major
regulator in Australia. AUASB uses to monitor the auditing service provided by Australian
auditors. Along with this, they also monitor whether the practicing professional auditors are
complying with the auditing principles and standards or not. Due to the auditing regulators in
relation to the application and monitoring of the Australian auditing standards and ethical
obligations for the auditors, the audit quality enhanced and the audit reports become more
reliable for the investors and other stakeholders of a company. The monitoring of auditing
standards and ethical obligations has improved the overall performance of auditors. It has
improved their capability of being straightforward, honest, not compromising with professional
judgments, maintaining confidentiality, and delivering professional competence and due care
(auasb.gov.au, 2018). This particular regulator of Australian auditing system has improved
auditors performance and the quality of their auditing work by applying efficient auditing
standards and monitoring these standards (Moroney, Campbell & Hamilton, 2017).

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Reference List
Australian Government. (2018). Auditing and Assurance Standards Board: Home. Retrieved on
15th November 2018 from https://www.auasb.gov.au/
Australian Government. (2018). Auditing Standard ASA 250 Consideration of Laws and
Regulations in an Audit of a Financial Report. Retrieved on 15th November 2018 from
https://www.legislation.gov.au/Details/F2017L01172
Moroney, R., Campbell, F., & Hamilton, J. (2017). Auditing: A Practical Approach, 3rd Edition,
John Wiley & Sons Ltd, Milton, Queensland.