In September 2007 the Auditing and Assurance Standards Board (AUASB) issued a bulletin, Auditing small and medium sized entities (SMEs), where it indicated it would continue to monitor developments proposed at the international level.
The board would also continue to promote awareness of the two distinct levels of assurance provided by an audit and a review respectively, and liaise with professional bodies to encourage training the self-help guides.
Sample audit programs
The revised, updated and extended Sample audit programs for small to medium entities (SAPSE) guide was released by CPA Australia in July 2008.
The guide comprises a number of different sections: overview of audits; audit of a self managed superannuation fund; audit of an unincorporated association (for example, a junior sporting association); audit of an incorporated association (for example, a kindergarten); audit of a real estate agent's trust account; audit of a member's trust account; and audit of a solicitor's trust accounts.
Independence
In performing audits of SMEs, including self managed super funds (SMSFs), members must conform with APES 110 Code of ethics for professional accountants. In particular, reference is made to the independence requirements of the code.
CPA Australia's Independence guide: interpretations in a co-regulatory environment may assist members in interpreting these requirements.
Case studies in section three deal specifically with issues pertaining to audits of SMEs.
Using ASAs when auditing SMEs
The International Auditing and Assurance Standards Board (IAASB) has indicated that it is not in favour of issuing separate auditing standards for the auditing of SMEs.
It believes that any audit engagement is conducted in accordance with formally promulgated and issued auditing standards.
It does recognise, though, that the auditing of SMEs presents certain challenges to auditing professionals.
Part of the IAASB's planned strategies announced in the Strategy and Work Program for 2009 to 2011 focus on the needs of SMEs.
The International Federation of Accountants' (IFAC's) Small and Medium Practices Committee issued Guide to using international standards on auditing in the audit of small and medium sized entities (the guide) in December 2007.
Auditing SMSFs
Mandatory competency requirements have been introduced for members of the professional accounting bodies who wish to audit SMSFs for financial years commencing on or after 1 July 2008.
Members' Handbook blog
The latest blog entry on professional standards is about the first four exposure drafts of Australian auditing standards which have been released in clarity format.
