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2 Jul. 2008

AUASB issues guidance on new section in auditor’s report on remuneration disclosures

The AUASB today issued Guidance Statement GS 008 The Auditor’s Report on a Remuneration Report Pursuant to Section 300A of the Corporations Act 2001. The Guidance Statement provides guidance to auditors when expressing an opinion on whether the remuneration report, contained within the directors’ report, complies with section 300A of the Corporations Act 2001.

The auditor’s report will now have two distinct sections: the conventional section that includes the auditor’s opinion on the financial report; and a new section, which contains the auditor’s opinion on the remuneration disclosures in the directors’ report.

Merran Kelsall, Chairman of the Auditing and Assurance Standards Board (AUASB), reminds auditors and the investing public of the importance of reading the auditor’s report in its entirety, because there are now two separate opinions in the auditor’s report.

“All parts of the auditor’s report are important; none should be overlooked. Users of annual reports shouldn’t make financial judgments based on only one section of the auditor’s report. They need to read the entire auditor’s report to understand all the information provided by the auditor in relation to the audit of the financial report and the remuneration disclosures contained in the directors’ report,” Ms Kelsall said.