The International Auditing & Assurance Standards Board (IAASB) clarity projectbegan in 2003 and involved the revision of its standards with changes being made to the International Standards on Auditing (ISAs). The ICAA (2011) points out that the main purpose of the clarity project was to provide clarity and consistency to the application of the standards. Subsequently the Australian Auditing & Assurance Standards Board (AUASB) reviewed all its Australian Auditing Standards (ASAs) in October 2009. This isbecause; the ISAs serve as the underlying standards for all auditing standards (Dillon 2008).


According to AUASB (2009) Australia has kept pace with International Standards to ensure that Australia’s Auditing Standards are in line with the International Standards on Auditing. It has also completed its own clarity project recently.Major revisions have been made to ASAsissued to comply with the strategic direction given to the AUASB by the Financial Reporting Council (FRC) where it is required to have regard for any programme initiated by the IAASB

Revisionsin the reporting of financial statements include:

ASA 220 Quality Control for Audits of Historical Financial Informationhas been revised toASA 220 Quality Control for an Audit of a Financial Report andOther Historical Financial Information. The purpose of this standard is to provide guidance of firm personnel regarding quality control procedures for audits of historical financial information, including an audit of a financial report.

ASA 300 Planning an Audit of a Financial Report has been revised to ASA 300 Planning an Audit of Financial Statements to enable auditors understand what is required of them when planning an audit of Financial Statements.

ASA 540 Audit of Accounting Estimates which has been revised to ASA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures.The purpose of the revised ASA 540 was to establish requirements and to provide application and other explanatory material to auditors regarding their responsibilities relating to accounting estimates, including fair value accounting estimates, and related disclosures in an audit of a financial report.

ASA 580 Management Representations has been revised to ASA 580 Written Representations. The purpose of the Auditing Standard is to provide auditors with clear knowledge regarding their responsibility to obtain written representations from management and, where appropriate, those charged with governance in an audit of a financial report.The main difference between the revised standard and the previous standard is that

Auditing Standard ASA 580 is written in the “clarity” format using the equivalent International Standard on Auditing (ISA 580 Written Representations) as the underlying Auditing Standard. Consequently, the format, layout, and paragraph numbering styles are different from the previous Auditing Standard.

Other revised standardsrelating to financial statements include: ASA 240 The Auditor’s Responsibilities Relating to Fraud in anAudit of a Financial Report,ASA 250 Consideration of Laws and Regulations in an Audit ofa Financial Report,ASA 600 Special Considerations-Auditsof Group FinancialStatements (Including the Work of Component Auditors,ASA 720The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements.


Other revised standards not relating to Financial Statements include:

ASA 260 Communication of Audit Matters with Those Chargedwith Governance has been replaced by ASA 260 Communication with Those Chargedwith Governance.The purpose of the standard is to guide auditors on audit matters arising from the audit of the financial report between the auditor and those charged with governance of an entity.

ASA 530 Audit Sampling and Other Means of Testinghas been revised to ASA 530 Audit Sampling. The purpose of this standard is to help auditors in audit sampling and other means of selecting items for testing when designing audit procedures to gather sufficient appropriate audit evidence.

ASA 320 Materiality and Audit Adjustmentshas been revised to ASA 320 Materiality in Planning and Performing an Audit. The purpose of the standard is to provide explanatory guidance on materiality and its relationship with audit risk and it sets out the intentions of the AUASB on how the Auditing Standards are to be understood, interpreted and applied.

Other auditing standards are:ASA 102 Compliance with Ethical Requirements whenPerforming Audits, Reviews and Other AssuranceEngagements, ASA 200 Overall Objectives of the Independent Auditorand the Conduct of an Audit in Accordance with AustralianStandards on Auditing,ASA 330 The Auditor’s Responses to Assessed Risks.

Kemp (2010) points out that the revised auditing standards can further be subdivided into various categories. That is Standards relating to: responsibilities, planning, internal control, audit evidence, using the work of others, audit conclusions and reporting, auditing standards on review engagements, audit & assurance engagements.


The complete set of ASAs has various implications to Australian auditors. They include:

Auditors must comply with the new auditing standards as they have been set with AUASB in line with the strategic direction given by FRC and because they have the force of law for audits or reviews of financial reports prepared under part 2M.3 of the Corporations Act 2001(Cabe 2009).

According to Leung (2011) auditing services are changing rapidly in response to growing public expectations accountability and as a result of the increasing economic andtechnological complexities. This provides the need for auditors to adjust to any revised standards as they reflect the changing times. He acknowledges that the professional role and value of an auditor forces him/her to deliver valuable financial services. This is only possible if auditing standards are updated as the complexities in the profession increase.

Gay (2009) further states that Audit and Assurance services take a business risk approach; the standard that has been incorporated into both national and international auditing standards. The clarity project therefore offers auditors a guide to deal with the challenges associated with audit the profession.

Shailer (2009) emphasizes on the auditor’s decision-making process which requires integration of the most important concepts with certain practical aspects that enables auditors to cope with technology, e-commerce and fraud issues not only in the current standards but with digital world. The clarity project therefore clarifies what is expected of auditors in today’s world.


The AUSAB continues to follow the standards set by IAASB to keep Australian Auditing Standards up to date. This because the Auditing profession keeps changing with time and there is need for Australian auditors to stay informed in matters relating to auditing, as this is expected to ensure that they offer quality auditing services to their clients.




Arens Best Shailer, 2009, Essentials of Auditing Assurance Services and Ethics, Pearson Education.

AUASB staff, 2009, AUASB Auditing and Assurance Standards, LexisNexis Butterworths.

CaithlinMcCabe, 2009, Journal Article: clarity Project overview, Available from:

Bernadette Dillon,Journal Article: Clarity Project Overview, Available

Grant Gay, 2009, Auditing and Assurance services in Australia, McGraw- Hill Australia.

ICAA, 2011,

Philomena Leung, 2011, Modern Auditing & Assurance Services, John Wiley & Sons Australia Ltd.

Stephanie kemp, 2010, Auditing and Assurance Handbook 2010, John Wiley & Sons Australia Ltd.


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