New pronouncements in compliance engagements, performance engagements and the audit of disclosing entities that are companies were issued by the Auditing and Assurance Standards Board (AUASB) during July.
Also, four exposure drafts have been released as part of the AUASB's project to redraft auditing standards in clarity format.
Auditing standards pronouncements
The three pronouncements issued are:
- ASAE 3100 Compliance engagements
- ASAE 3500 Performance engagements
- GS 008 The auditor's report on a remuneration report pursuant to section 300A of the Corporations Act 2001
ASAE 3100 is a new assurance standard on compliance engagements which will assist members in the audit or review of an entity's compliance with requirements under legislation, regulation, company policies, statutory requirements and enforceable contractual obligations.
This standard is applicable for reporting periods or engagements commencing on or after 1 October 2008, with early adoption permitted.
ASAE 3500 is a new standard on performance engagements which will primarily be used in public sector assurance engagements.
These engagements assess performance activities against established benchmarks, such as those related to the adequacy of internal controls, and the efficient and economic use of resources.
The standard is applicable for performance engagements commencing on or after 1 January 2009.
GS 008 is relevant to auditors of disclosing entities that are companies.
The Corporations Act 2001 requires an auditor to express an opinion on the remuneration report included in the director's report. GS 008 is issued by the AUASB to highlight that the auditor's opinion on the remuneration report included in the director's report, is distinct from the auditor's opinion on the financial report.
This guidance statement aims to clearly distinguish both opinions in the audit report, in accordance with ASA 700 The auditor's report on a general purpose financial report.
The guidance statement also provides illustrated examples of auditor's reports addressing the additional reporting requirement.
Project to redraft ASAs
On 31 July 2008, the AUASB announced that auditors will need to comply with a revised set of Australian Auditing Standards (ASAs), which will become operative on 1 January 2010.
In line with the strategic direction provided by the Financial Reporting Committee, these standards are being revised in a clarity format and will conform with the revised International Standards on Auditing.
Revising standards in a clarity format ensures a clear and consistent application of international standards globally.
Revised ASAs will not be issued until all redrafted standards are approved. This is expected to occur in October 2009.
The first four exposure drafts (ASA 240, ASA 260, ASA 315 and ASA 330) were released on 31 July, with an exposure period of 30 days. The AUASB indicated that while there are some changes from existing ASAs, they are not significant.
Members are invited to submit their comments on the proposals to professionalstandards@cpaaustralia.com.au
CPA Australia will make a submission on behalf of members.
For further information visit the AUASB website.
