Auditing small entities brings many unique challenges. The applicable auditing and assurance standards for small entities are the same as those for much larger audits. There is no substitute for knowledge of those standards in scaling the approach to each different audit situation.
There is a diverse range of audit, review and compilation engagements conducted for small entities in Australia. Whilst many are required by legislation or regulation, others are set out in the entity’s constitution or rules or elected by a Board resolution.
Containing extensive and practical tools and guidance, the Small Entities Audit Manual publication (SEAM) is designed to practitioners navigate their way through the relevant legislation and supports them in meeting the requirements of the Code of Ethics and Auditing and Assurance Standards when planning, conducting and reporting on these engagements.
SEAM provides guidance on audit, review and other assurance engagements, with specific sections applicable to engagements for:
- a company limited by guarantee
- an association – incorporated or unincorporated
- a self-managed superannuation fund
- client monies held by a member
- a solicitor’s trust account
- a real estate agent’s trust account
- grant acquittals and multi-scope engagements.
Often engagements combine audit, review or compilation of financial, non-financial, compliance or controls into one engagement. These “multi-scope engagements” create added complexity and each present their own challenges, which mean that auditing small entities does not necessarily equate to being simple, straightforward or low risk engagements.
In a recent live chat, our expert presenters addressed questions about any of the key areas in SEAM 2017.
The six key themes were:
- Audits of P&C associations not-for-profit entities, solicitor trust account audits, real estate trust accounts, ACNC registered charities, and strata plans and variable outgoing audits.
- Auditor report templates for concise financial reports and audits of special purpose financial reports for incorporated associations and school councils.
- Audit planning checklists.
- Review of financial statements prepared under standards of another jurisdiction.
- Independence issues.
- SEAM availability and format.
Learn more in the transcript, which is available as a PDF download
The experts were:
- Claire Grayston CPA, Policy Advisor - Audit and Assurance, CPA Australia
- Ram Subramanian, Policy Advisor – Reporting, CPA Australia
- Sarah Scoble, Learning Curator – Education, CPA Australia