The overall objective of the auditor as described in ASA 200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Australian Auditing Standards, is to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial report is prepared, in all material respects, in accordance with an applicable financial reporting framework.

To obtain reasonable assurance, the auditor obtains sufficient appropriate audit evidence to reduce audit risk to an acceptably low level and thereby enables the auditor to draw reasonable conclusions on which to base the auditor’s opinion.

The investor’s auditor gathers sufficient appropriate audit evidence to evaluate:

1. representations made by those charged with governance of the investor as to the existence and ownership of the investment, and the existence or otherwise of significant influence;
2. the appropriateness of the carrying amounts of an investment, the investor’s share of the associate’s profits and losses, including the required adjustments and dividends received or receivable from an associate;
3. the appropriateness of adjustments to the carrying amounts of an investment due to post-acquisition changes in an associate’s reserves;
4. the adequacy of financial report disclosure; and
5. the appropriateness of other equity accounting adjustments such as adjustments for dissimilar accounting policies and elimination of unrealised profits and losses.