October 2022 Release

Webinar
5 October 2022
Agenda
● Changes to Audit System
○ Background
○ Key FAQs
○ 315 Changes to Audit System
○ 220 Changes to Audit System
○ Other changes
○ Updating “engagement files”

● Changes to FinancialsIFRS

● Q&A

2
01 Changes in Audit System

3
Background
● 315 discussions started back in May 2021
● Several International networks were consulted
● Regular global distributor meetings
● Australian industry stakeholder walk throughs Feb 2022
● Large Australian Network firms walk throughs throughout 2022

4
Key FAQs
● Staff update guide (update method 1)
● Create New File and Import Data (update method 2)
● Expectations with the October 2022 update
● Audit System document and procedure updates

● What has changed in Sampling?

● Why have CWANZ updated their Assertions?
● Recommended approach for updating my existing 315 worksheets
● What's New - Audit System
● How do I use the '3-210 Risk Assessment' workpaper?
● How do I use the new Flat-form Risk tables?
● How does 2-18X and 2-190 work and how are they related?
● What’s New - FinancialsIFRS

5
315 Changes in Audit System
● Risk Card & Risk Reports
○ “What can go wrong” - no longer available
“Inherent risk factors” and “Inherent risk factors categories” - New fields

○ Changes in risk assessment scale and some terminology:

■ Likelihood of misstatement = “High, Low” (formerly “1, 2, 3, 4, 5”)
■ Magnitude of misstatement = “High, Low” (formerly “1, 2, 3, 4, 5”)
■ Inherent risk = “Significant, Higher, Lower” (formerly “High, Medium Low”)
■ Control risk = “High, Low” (formerly “High, Medium Low”)
■ Risk of Material Misstatement = “Significant, Higher, Lower” (formerly “High, Medium Low”)

6
315 Changes in Audit System
New 315 Risk Card Current 315 Risk Card

New Fields

7
315 Changes in Audit System
New 315 Risk Card - Financial Report Level (FRL) Current 315 Risk Card - Entity Level (EL)

8
315 Changes in Audit System
New 315 Risk Card - New Assessments Current 315 Risk Card - Current Assessments

9
315 Changes in Audit System
Inherent Risk Factors Inherent Risk Factors Categories

10
315 Changes in Audit System
● Understanding the Entity worksheets
○ 2-100 Understanding the Entity (Nature and Environment) - New design
○ 2-105 Understanding the Entity (System of Internal Controls - FRL)- New design
○ 2-18X Key Business Process (Master) - New document
○ 2-190 IT Applications (formerly 2-110) - New design

● 3-210 Risk Assessment Summary - New worksheet

○ Summary of important information contained in RRPT and FSA in one worksheet
○ Adjust the extent of information presented via a variety of filters
○ Include additional FSA items added by an auditor (e.g. disaggregated revenue streams)
○ Designed to be exported to PDF and/or printed
○ Final Phase A sign-off workpaper

11
315 Changes in Audit System
● Changes to Assertions
○ New assertions: C E AV P (formerly “C E A V”)
○ Why? To aligned with both IFAC and what is more commonly used internationally
○ Workpapers affected:
■ FSA
■ Sampling
■ IRAM have all be updated
■ PHASE B - Risk Response Programs (B.10 to X.10)

● Auditing Standard ASA 2020-1 amendments (auasb.gov.au)

12
220 Changes in Audit System
● Understanding the Entity worksheets
○ 3-220 QM Program - Engagement Partner Responsibilities (Planning) - New Program
○ 3-230 QM Program - Engagement Quality Review (Planning) - New Program
○ 5-310 QM Program - Engagement Partner Responsibilities - Updated Program
○ 5-320 QM Program - Engagement Quality Review - Updated Program

● Terminology changes
○ QC to QM / Quality Control to Quality Management
○ EQCR to EQR / Engagement Quality Control Review to Engagement Quality Review

● Auditing Standard ASA 2021-1 amendments (auasb.gov.au)

13
Other changes
● NZ AS 1 - The Audit of Service Performance Information (NZ engagements only)

● NFSAGRP - Worksheet Financial Statement Area (Group Balances) (ASA 600)

○ Updated the worksheet to include new Assertions C E AV P
○ New ability to link to 5 custom FSAs

● 5-205 - Communication Matters for Attention

○ Alternative to MRPT and Management Letters (5-210, 5-220)
○ Include Reportable Items, Risks, Controls, Sensitive FSAs, Outstanding Client Requests,
Audit Opinion, Journals and Graphs and Ratios.
○ Can be exported to WORD.

14
Updating “engagement files”
● Important!
○ Audit 24.00 update will make irreversible changes to your engagements (back-ups are critical)
○ Never run Audit 24.00 updates on an “in-progress” engagement.
○ “Read” FAQ: Expectations with the October 2022 update

○ Understand the “two” update methods available

1. Year-end Close (Update method 1)
2. Create file and import data (Update method 2)

○ Understand the “Post-update steps” that must be run on all engagement files
1. Processing "Risks" and "Risk Reports" to the new 315 standard (Update method 1 and 2)
2. Reviewing “FSA assessments” and “Summaries” to align with updated risks (Update method 1 only)
3. Update “Sampling Worksheets” with new Inherent & Control risk assessments (Update method 1 only)
4. Confirming new assertion updates for “Risk Response Programs (B.10 - X.10)” (Update method 1 only)

○ Stay on version 23.00 if unsure (Updating to 24.00 is not compulsory until you need to comply with 315)

15
Understand the “two” update methods available
● Year-end Close (Update method 1) ● Create file and import data (Update method 2)
○ Advantages: ○ Advantages:
■ Original Document Manager is retained ■ FAST! Much quicker to get going.
■ Any additional industry specific programs ■ Brand new Document Manager with existing trial balance
created will be retained. mapped, consolidation tree (if applicable), risks, controls
■ FSA assessment is retained reportable items all imported.
○ Disadvantages: ■ All content is up-to-date and Compliant with 315 & 220
■ The update method 1 can be confusing and ○ Disadvantages:
can take up to 15 - 20 minutes per file ■ Industry specific programs will not be imported
■ The method can be complex and may need ■ Any Document Manager customisations will be lost
assistance from support ■ Any Permanent External Documents needs to be copied
■ Additional reviews (inc. 6-100) to ensure compliance across from last year’s file
■ Requires all “four post-update” steps ■ Requires “one post-update” steps

○ When should I apply Update method 1? ○ When should I apply Update method 1?
■ Recommended for engagement files “heavily ■ Recommended for standard engagement files.
customised” with a lot of industry specific
programs, procedures and other components.

16
Year-end Close (Update method 1)

17
Year-end Close (Update method 1)

18
Year-end Close (Update method 1)

19
Year-end Close (Update method 1)
● What engagement profile am I using?
○ Audit Profile 1 - Australia
○ Audit Profile 2 - New Zealand
○ Audit Profile 3 - Micro Audit
○ Audit Profile 4 - Review
○ Audit Profile 5 - OneForm (Australia)
○ Audit Profile 6 - OneForm (New Zealand)

20
Year-end Close (Update method 1)

21
Year-end Close (Update method 1)
● Update method 1 “Post-update steps”
1. Processing "Risks" and "Risk Reports" to the new 315 standard
2. Reviewing “FSA assessments” and “Summaries” to align with updated risks
3. Update “Sampling Worksheets” with new Inherent & Control risk assessments
4. Confirming new assertion updates for “Risk Response Programs (B.10 - X.10)”

● Confirming compliance (6-100)

22
Step 1 - Processing "Risks" and "Risk Reports"

23
Step 2 - Reviewing “FSA assessments” and “Summaries”

24
Step 3 - Update “Sampling Worksheets”

25
Step 4 - Assertion updates for “Programs (B.10 - X.10)”

26
Confirming Compliance

27
Create file and import data (Update method 2)

28
Create file and import data (Update method 2)

29
Create file and import data (Update method 2)
● Update method 2 “Post-update steps”
1. Processing "Risks" and "Risk Reports" to the new 315 standard

30
Step 1 - Processing "Risks" and "Risk Reports"

31
02 Changes in FinancialsIFRS

32
Changes to FinancialsIFRS
● No mapping updates
● Entities to be deleted next year
● Basis of Preparation note - update due to new standard release: AASB 2022-4
○ Special purpose for-profit entities
● Audit Report - update to Auditor’s additional responsibilities section
● QLD Associations - update to Act amendment year

33
Entities to be deleted next year
The following reporting entities have been removed from the reporting standards, as such they will also be
removed from next years October 2023 release:
● Large Pty Ltd - Special Purpose
● Large Pty Ltd - General Purpose - RDR
● ACNC Entity - RDR
● Unlisted Public Company Limited by Shares - General Purpose - RDR
● Unlisted Public Company Limited by Guarantee - General Purpose - RDR

34
Basis of preparation note - update due to new standard
release: AASB 2022-4
This new standard released in late June 2022 will result in increased disclosures for special purpose financial
statements for the following for-profit entities:
● Unlisted Public Company Limited by Shares - Special Purpose
● Small Pty Ltd (Corps Act) - Special Purpose

https://www.caseware.com.au/resource/aasb-2022-4/

35
Audit Report - update to Auditor’s additional responsibilities
section
The static text section has been replaced, and is now automated based on the following selections:
● Presentation style: Single / Consolidated
● Entity type: Listed / Unlisted
● Key Audit Matters: Yes / No

36
QLD Associations - update to Act amendment year
The change is displayed in the following two areas:
● Introduction
● Audit Report

37
38
Caseware Australia & New Zealand

Office: Level 11, 155 Queen Street, Melbourne, VIC, 3000, Australia
Mail: PO Box 64, Abbotsford, VIC 3067, Australia
Tel: +61 3 9660 4660
Web: www.caseware.com.au