The ATO stated that the amendments were intended to align the IAR with the changes made to the Auditor Contravention Report (ACR) instructions where the ATO advised these same contraventions did not need to be reported to the Tax Commissioner in the ACR as it would not be taking compliance action against them.

In an online update, the ATO stated it has received feedback from auditors over the past month who have expressed concerns about this approach, given that the wording in the opinion clause of the IAR has not been changed in order to exclude these types of contraventions.

“Since we do not plan to change the current IAR wording for the 2019–20 financial year, we have reverted the IAR instructions back to their original wording to alleviate these concerns and ensure consistent auditor reporting,” the Tax Office stated.

“This means auditors will once again be required to modify their opinion in Part B of the IAR where they identify any material breach of the provisions and regulations listed within the IAR.”

The ATO noted that the addendum to the ACR instructions has not been changed.

“Those instructions still provide details of certain contraventions we have advised will not need to be reported in the ACR as a result of the impacts of COVID-19,” it said.

The Tax Office has assured auditors who correctly relied on the previous version of the instructions when conducting any 2019–20 audits in the last few months that they will still meet their reporting obligations during this period.

“They will not need to recall those audit reports and re-issue them,” the ATO said.