For the purposes of this Auditing Standard, the following terms have the meanings attributed below:
Initial audit engagement means an engagement in which either:
- The financial report for the prior period was not audited; or
- The financial report for the prior period was audited by a predecessor auditor.
Opening balances means those account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and reflect the effects of transactions and events of prior periods and accounting policies applied in the prior period. Opening balances also include matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.
Predecessor auditor means the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.