ASAE 3610 / AWAS 2

Australian Water Accounting Standard 1 Preparation and Presentation of General Purpose Water Accounting Reports (AWAS 1) requires a general purpose water accounting report to be subjected to assurance to establish whether the report is presented fairly in accordance with that Standard.

AWAS 1 states that a general purpose water accounting report comprises the following components: 

1. Statement of water assets and water liabilities 
2. Statement of changes in water assets and water liabilities^[1][2]
3. Statement of water flows^[3]
4. Note disclosures
5. Accountability statement
6. Contextual statement

This Standard deals with assurance engagements to report on the water accounting statements, note disclosures and the accountability statement only. It does not cover the contextual statement, which is not subject to assurance. However, the assurance practitioner reads the contextual statement to identify material inconsistencies, if any, with the other components of the general purpose water accounting report.^[4]
(Ref: Para. 91, A157-A163)

This Standard does not deal with, or provide specific guidance for, assurance engagements to report on the following: Water accounting reports prepared in accordance with special purpose water reporting frameworks. Single components of a general purpose water accounting report or specific elements, accounts or items of a component. Water-related information not included in paragraph 5 of this Standard. This Standard may nonetheless provide guidance that may be useful in conducting such engagements. (Ref: Para. A1)

Attestation and Direct Engagements

The Framework for Assurance Engagements (Assurance Framework) and ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ASAE 3000) note that an assurance engagement may be either an attestation engagement or a direct engagement. This Standard deals only with attestation engagements.^[5]

Procedures for Reasonable Assurance and Limited Assurance Engagements

ASAE 3000 notes that an assurance engagement may be either a reasonable assurance engagement or a limited assurance engagement.^[6] This Standard deals with both reasonable and limited assurance engagements. (See paragraph 15(c) of this Standard)

In both reasonable assurance and limited assurance engagements on a general purpose water accounting report, the assurance practitioner chooses a combination of assurance procedures, which can include: inspection, observation, confirmation, recalculation, re-performance, analytical procedures and enquiry. Determining  the assurance procedures  to be performed  on a particular engagement is a matter of professional judgement Because general purpose water accounting reports cover a wide range of water report entities, the nature, timing and extent of procedures are likely to vary considerably from engagement to engagement.

Unless otherwise stated, each requirement of this Standard applies to both reasonable and limited assurance engagements.   Because  the level of assurance obtained in a limited assurance engagement is lower than in a reasonable assurance engagement, the procedures the assurance practitioner performs in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement.7 Requirements that apply to only one or the other type of engagement have been presented in a columnar format with the letter "L" (limited assurance) or "R" (reasonable assurance) after the paragraph number. Although some procedures are required only for reasonable assurance engagements, they may nonetheless be appropriate in some limited assurance engagements (see also paragraph A82 of this Standard, which outlines the primary differences between the assurance practitioner's further procedures for a reasonable assurance engagement and a limited  assurance engagement on a general purpose water accounting report). (Ref: Para. A2, A82)

Relationship with ASAE 3000, Other Pronouncements and Other Requirements

The assurance practitioner is required to comply with ASAE 3000 and this Standard when performing an assurance engagement to report on a general purpose water accounting report. This Standard supplements, but does not replace, ASAE 3000 and expands on how ASAE 3000 is to be applied in an assurance engagement to report on a general purpose water accounting report. (Ref: Para. A14)

Compliance with ASAE 3000 requires, among other things, that the assurance practitioner comply with relevant ethical requirements^[8] related to assurance engagements, or other professional requirements, or requirements imposed by law or regulation, that are at least as demanding. It also requires the lead assurance practitioner to be a member of a firm that applies ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements (ASQM 1) or other professional requirements, or requirements in law or regulation, that are at least as demanding as ASQM 1.^[9][10](Ref: Para. A3-A4)

Where the assurance  engagement is subject to law or regulation, this Standard does not override that law or regulation.  In the event that law or regulation differs from  this Standard, an engagement conducted in accordance with that law or regulation will not automatically comply with this Standard. The assurance practitioner is entitled to represent compliance with  this Standard in addition to compliance with law or regulation only when all applicable requirements of this Standard have been met.

The assurance practitioner shall not represent compliance with this Standard unless the assurance practitioner has complied with the requirements of both this Standard and ASAE 3000. (Ref: Para. A3-A4, A14, A17, A25 and A164)

Skills, Knowledge and Experience

The lead assurance practitioner shall:

1. Have competence in assurance skills and techniques developed through extensive training and practical application, and sufficient competence in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities to accept responsibility for the assurance conclusion; and
2. Be satisfied that those persons who are to perform the engagement collectively have the appropriate competence and capabilities, including having sufficient time to perform the engagement, including in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities, and in assurance, to perform the assurance engagement in accordance with this Standard. (Ref: Para. A15-A16)

Preconditions for the Engagement

In order to establish whether the preconditions for the engagement are present, the assurance practitioner shall, at a minimum:

1. When determining the suitability of the applicable criteria, as required by ASAE 3000,^[13] determine whether the applicable criteria encompass: (Ref: Para. A19-A22)
   1. The appropriate identification of water assets and water liabilities to be accounted for; (Ref: Para. A20)
   2. Acceptable quantification approaches; and (Ref: Para. A21)
   3. Adequate disclosures such that intended users can understand the significant judgements made in preparing the general purpose water accounting report. (Ref: Para. A22)
2. Obtain from the responsible party an agreement that they acknowledge and understand their responsibility for:
   1. Designing, implementing and maintaining such internal control as they determine is necessary to enable the preparation of a general purpose water accounting report that is free from material misstatement, whether due to fraud or error;
   2. Preparing and presenting the general purpose water accounting report in accordance with the applicable criteria; and
   3. Referring to or describing in the general purpose water accounting report the applicable criteria and, when it is not readily apparent from the engagement circumstances, who developed the criteria. (Ref: Para. A23)
   4. Providing the assurance practitioner with: (Ref: Para. A24)
      1. Access to all information of which they are aware that is relevant to the preparation of the general purpose water accounting report such as records, documentation and other matters;
      2. Additional information that the assurance practitioner may request from them for the purpose of the engagement; and
      3. Unrestricted access to persons from whom the assurance practitioner determines it necessary to obtain assurance evidence.

If the preconditions for an assurance engagement are not present, the assurance practitioner shall discuss the matter with the engaging party. If changes cannot be made to meet the preconditions, the assurance practitioner shall not accept the engagement as an assurance engagement unless required by law or regulation to do so. However, an engagement conducted under such circumstances does not comply with this Standard or ASAE 3000. Accordingly, the assurance practitioner shall not include any reference within the assurance report to the engagement having been conducted in accordance with this Standard or ASAE 3000.

Agreement on the Terms of the Engagement

The terms of the engagement required to be agreed by ASAE 3000^[14] shall include: (Ref: Para. A25)

1. The objective and scope of the engagement;
2. The responsibilities of the assurance practitioner;
3. The responsibilities of the responsible party, including those described in paragraph 18(b);
4. Identification of the applicable criteria for the preparation of the general purpose water accounting report;
5. Reference to the expected form and content of any reports to be issued by the assurance practitioner and a statement that there may be circumstances in which a report may differ from its expected form and content; and
6. An acknowledgement that the responsible party agrees to provide written representations at the conclusion of the engagement.

ASAE 3000 requires the assurance practitioner to plan and perform the engagement with professional scepticism, recognising that circumstances mat exist that cause the general purpose water accounting report to be materially misstated. ^[15]

ASAE 3000 requires the assurance practitioner to exercise professional judgement in planning and performing an assurance engagement on a general purpose water accounting report, including determining the nature, timing and extent of procedures.^[16]

ASAE 3000 requires the assurance practitioner to apply assurance skills and techniques as part of an iterative, systematic engagement process.^[17]

When planning the engagement as required by ASAE 3000,^[18] the assurance practitioner shall: (Ref: Para. A26-A31)

1. Identify the characteristics of the engagement that define its scope;
2. Ascertain the reporting objectives of the engagement to plan the timing of the engagement and the nature of the communications required;
3. Consider the factors that, in the assurance practitioner's professional judgement, are significant in directing the engagement team's efforts;
4. Consider the results of engagement acceptance or continuance procedures (see paragraphs 17-20) and, where applicable, whether knowledge gained on other engagements performed by the lead assurance practitioner involving the water report entity is relevant;
5. Ascertain the nature, timing and extent of resources necessary to perform the engagement, including the involvement of experts and of other assurance practitioners (Ref: Para. A30-A31); and
6. Determine the impact of the internal audit function, if any, on the engagement.

Determining Materiality and Performance Materiality When Planning the Engagement

When establishing the overall engagement strategy, the assurance practitioner shall determine materiality for the general purpose water accounting report. (Ref: Para. A32-A40)

The assurance practitioner shall determine performance materiality for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further procedures.

Revision as the Engagement Progresses

The assurance practitioner shall revise materiality for the general purpose water accounting report in the event of becoming aware of information during the engagement that would have caused the assurance practitioner to have determined a different amount initially. (Ref: Para. A41)

Obtaining an Understanding of the Water Report Entity and Its Circumstances

The assurance practitioner shall obtain an understanding of the following: (Ref: Para. A42-A44)

1. The nature of the water report entity, including the physical and administrative aspects of the entity and the water resources being reported.
2. Industry, regulatory, and other externally-imposed requirements, if any, affecting the operations of the water report entity, including the applicable criteria.
3. The water management objective and strategy, if any, and associated economic, regulatory, environmental, social, cultural, physical and reputational risks. (Ref: Para. A45)
4. The selection and application of reporting policies and quantification approaches, including the reasons for changes, if any, from the prior year.
5. Whether the responsible party used a management’s expert to assist them in preparing the general purpose water accounting report. (Ref: Para. A46)
6. Whether there have been any significant events that have affected information included in the general purpose water accounting report. (Ref: Para. A47)
7. The uncertainties associated with the elements reported in the general purpose water accounting report. (Ref: Para. A48-A53)
8. Estimates, including related disclosures, included in the general purpose water accounting report.
9. The potential for double-counting of water assets and water liabilities in the general purpose water accounting report.
10. Whether there is an internal audit function and, if so, its activities and main findings with respect to water accounting and preparation of the general purpose water accounting report.
11. Other relevant internal review functions, their activities and main findings.
12. Relevant technical and peer reviews.

Procedures to Obtain an Understanding and to Identify and Assess Risks of Material Misstatement

The procedures to obtain an understanding of the water report entity and its circumstances and to identify and assess risks of material misstatement shall include the following: (Ref: Para. A42-A44, A54)

1. Enquiries of those who, in the assurance practitioner’s judgement, have information that is likely to assist in identifying and assessing risks of material misstatement due to fraud or error.
2. Analytical procedures. (Ref: Para. A55-A57)
3. Observation and inspection. (Ref: Para. A58-A60)

Obtaining an Understanding of Internal Control

Other Procedures to Obtain an Understanding and to Identify and Assess Risks of Material Misstatement

If the lead assurance practitioner has performed other assurance engagements relating to the water report entity, the lead assurance practitioner shall consider whether information obtained from  those engagements is relevant to identifying  and assessing risks of material misstatement. (Ref: Para. A65)

The assurance practitioner shall make enquiries of the responsible party and others involved in preparing the general purpose water accounting report, as appropriate, to determine whether they have knowledge of any actual, suspected or alleged fraud or non-compliance with law or regulation affecting the general purpose water accounting report. (Ref: Para. A76-A78)

The lead assurance practitioner and other key members of the engagement team, and any key assurance practitioner's external experts, shall discuss the susceptibility of the general purpose water accounting report to material misstatement whether due to fraud or error, and the application of the applicable criteria to the water report entity's facts and circumstances. The lead assurance practitioner shall determine which matters are to be communicated to members of the engagement  team, and to any assurance practitioner's external experts not involved in the discussion.

The assurance practitioner shall evaluate whether the quantification approaches and reporting policies adopted by the responsible party, are appropriate for its operations, and are consistent with the applicable criteria, quantification approaches and reporting policies used in the relevant industry and in prior periods.

Performing Procedures at Other Locations

The assurance practitioner shall determine whether it is necessary in the circumstances of the engagement to perform procedures at other locations, other than where the general purpose water accounting report is prepared. (Ref: Para. A66-A69)

Internal Audit

Where there is an internal audit function that is relevant to the engagement, the assurance practitioner shall: (Ref: Para. A70)

1. Determine whether, and to what extent, to use specific work of the internal audit function; and
2. If using the specific work of the internal audit function, determine whether that work is adequate for the purposes of the engagement.

Identifying and Assessing Risks of Material Misstatement

Causes of Risks of Material Misstatement

When performing the procedures required by paragraphs 38L or 38R, the assurance practitioner shall consider at least the following factors: (Ref: Para. A76-A81)

1. The likelihood of intentional misstatement in the general purpose water accounting report; (Ref: Para. A76-A78)
2. The likelihood of non-compliance with the provisions of law or regulation generally recognised to have a direct effect on the content of the general purpose water accounting report; (Ref: Para. A79)
3. The likelihood of omission, or misstatement, of potentially significant water assets, water liabilities or changes in water assets and water liabilities; (Ref: Para. A80(a))
4. Significant regulatory changes; (Ref: Para. A80(b))
5. The nature of operations; (Ref: Para. A80(c))
6. The likelihood of double counting of water assets, water liabilities or changes in water assets and water liabilities; (Ref: Para. A80(e))
7. The nature of quantification approaches; (Ref: Para. A80(f))
8. The degree of subjectivity in the quantification of water assets, water liabilities and changes in water assets and water liabilities; (Ref: Para. A80(g))
9. Whether there are significant water assets or water liabilities that are outside the normal course of business of the water report entity, or that otherwise appear to be unusual; (Ref: Para. A80(g) )
10. Whether any unaccounted-for difference^[19] is outside the normal operation of the water report entity, or that otherwise appears to be unusual; (Ref: Para. A80(h)) and
11. How significant estimates are made and the assumptions, concepts and data on which they are based. (Ref: Para. A80(j))

The assurance practitioner shall design and implement overall responses to address the assessed risks of material misstatement at the general purpose water accounting report level. (Ref: Para. A82-A85)

The assurance practitioner shall design and perform further procedures whose nature, timing and extent are responsive to the assessed risks of material misstatement, having regard to the level of assurance, reasonable or limited, as appropriate. (Ref: Para. A82)

Overall Responses and Further Procedures

Analytical Procedures Performed in Response to Assessed Risks of Material Misstatement

Procedures Regarding Estimates

Procedures Related to the Future Prospects Note

The assurance practitioner shall obtain sufficient appropriate assurance evidence about whether the disclosures in the future prospects note in the general purpose water accounting report: (Ref: Para. A97-A101)

1. Are in accordance with the requirements of AWAS 1; and
2. Are reasonable in the context of AWAS 1.

Procedures Related to Unaccounted-for Differences

The assurance practitioner shall obtain sufficient appropriate assurance evidence about whether the disclosures regarding unaccounted-for differences, if any, in the general purpose water accounting report: (Ref: Para. A102-A103)

1. Are in accordance with the requirements of AWAS 1; and
2. Are reasonable in the context of AWAS 1.

Information Prepared Using the Work of a Management's Expert

If information to be used as assurance evidence has been prepared using the work of a management’s expert, the assurance practitioner shall, to the extent necessary having regard to the significance of that expert’s work for the purposes of the assurance engagement: (Ref: Para. A104-A105)

1. Evaluate the competence, capabilities and objectivity of that expert; (Ref: Para. A106)
2. Obtain an understanding of the work of that expert; and (Ref: Para. A107)
3. Evaluate the appropriateness of that expert’s work as assurance evidence. (Ref: Para. A108)

Sampling

When sampling is used, the assurance practitioner shall, when designing the sample, consider the purpose of the procedure and the characteristics of the population from which the sample will be drawn. (Ref: Para. A82(b), A109)

Fraud, Law and Regulation

The assurance practitioner shall respond appropriately to fraud or suspected fraud and non-compliance or suspected non-compliance with law or regulation identified during the engagement. (Ref: Para. A110-A111)

Procedures Regarding the General Purpose Water Accounting Report Aggregation Process

Additional Procedures

Accumulation of Identified Misstatements

The assurance practitioner shall accumulate misstatements identified during the engagement, other than those that are clearly trivial. (Ref: Para. A116)

Consideration of Identified Misstatements as the Engagement Progresses

The assurance practitioner shall determine whether the overall engagement strategy and engagement plan need to be revised if:

1. The nature of identified misstatements and the circumstances of their occurrence indicate that other misstatements may exist that, when aggregated with misstatements accumulated during the engagement, could be material; or
2. The aggregate of misstatements accumulated during the engagement approaches materiality determined in accordance with paragraphs 25-27 of this Standard.

If, at the assurance practitioner's request, the responsible party has examined a type of water asset or water liability or disclosure and corrected misstatements that were detected, the assurance practitioner shall perform procedures with respect to the work performed by them to determine whether material misstatements remain.

Communication and Correction of Misstatements

The assurance practitioner shall communicate on a timely basis all misstatements accumulated during the engagement with the responsible party and shall request the responsible party to correct those misstatements.

If the responsible party refuses to correct some or all of the misstatements communicated by the assurance practitioner, the assurance practitioner shall obtain an understanding of their reasons for not making the corrections and shall take that understanding into account when forming the assurance practitioner's conclusion.

Evaluating the Effect of Uncorrected Misstatements

Prior to evaluating the effect of uncorrected misstatements, the assurance practitioner shall reassess materiality determined in accordance with paragraphs 25-27 of this Standard to confirm whether it remains appropriate in the context of the general purpose water accounting report.

The assurance practitioner shall determine whether uncorrected misstatements are material, individually or in the aggregate. In making this determination, the assurance practitioner shall consider the size and nature of the misstatements, and the particular circumstances of their occurrence. (See paragraph 99 of this Standard)

Opening Balances

The assurance practitioner shall read the most recent general purpose water accounting report, if any, and the predecessor assurance practitioner's report thereon, if any, for information relevant to opening balances, including disclosures.

The assurance practitioner shall obtain sufficient appropriate assurance evidence about whether the opening balances contain misstatements that materially affect the current period’s general purpose water accounting report by: (Ref: Para. A117-A118)

1. Determining whether the prior period’s closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;
2. Determining whether the opening balances reflect the application of appropriate water accounting policies; and
3. Performing one or more of the following:
   1. Where the prior period general purpose water accounting report was assured, reviewing the predecessor assurance practitioner’s working papers to obtain evidence regarding the opening balances;
   2. Evaluating whether assurance procedures performed in the current period provide evidence relevant to the opening balances; or
   3. Performing specific assurance procedures to obtain evidence regarding the opening balances.

If the prior period general purpose water accounting report was assured by a predecessor assurance practitioner and there was a modification to the conclusion, the assurance practitioner shall evaluate the matter giving rise to the modification in assessing the risks of material misstatement in the current period general purpose water accounting report.

Effect on the Assurance Report

If the assurance practitioner is unable to obtain sufficient, appropriate evidence regarding opening balances, the assurance practitioner shall express a qualified conclusion or disclaim a conclusion on the general purpose water accounting report, as appropriate. (Ref: Para. A119-A120)

If the assurance practitioner concludes that:

1. The opening balances contain a misstatement that materially affects the current period general purpose water accounting report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed; or
2. The current period water accounting policies are not consistently applied in relation to opening balances in accordance with AWAS 1; or
3. A change in water accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with AWAS 1

the assurance practitioner shall express a qualified conclusion or an adverse conclusion, as appropriate.

If the predecessor assurance practitioner's conclusion regarding the prior period general purpose water accounting report included a modification that remains relevant and material to the current  general purpose water accounting report, the assurance practitioner shall modify the assurance practitioner's conclusion on the current period general purpose water accounting report.

When the assurance practitioner intends to use the work of another assurance practitioner, the assurance practitioner shall:

1. Communicate clearly with the other assurance practitioner about the scope and timing of the work and findings of the other assurance practitioner; and (Ref: Para. A121-A122)
2. Evaluate the sufficiency and appropriateness of evidence obtained and the process for including related information in the general purpose water accounting report. (Ref: Para. A123)

Determining the Need for an Assurance Practitioner's Expert

If expertise in a field other than water accounting and assurance is necessary to obtain sufficient appropriate assurance evidence, the assurance practitioner shall determine whether to use the work of an assurance practitioner's expert. (Ref: Para. A124-A127)

The Competence, Capabilities and Objectivity of the Assurance Practitioner's Expert

The assurance practitioner shall evaluate whether the assurance practitioner's expert has the necessary competence, capabilities and objectivity for the assurance practitioner's purposes. (Ref; Para. A128-A129)

The assurance practitioner shall obtain sufficient understanding of the field of expertise of the assurance practitioner's expert to enable the assurance practitioner to determine the nature, scope and objectives of that expert's work for the assurance practitioner's purposes. (Ref: Para. A129(c))

Agreement with the Assurance Practitioner's Expert

The assurance practitioner shall agree, in writing, when appropriate, on the following matters, with the assurance practitioner’s expert: (Ref: Para. A130-A137)

1. The nature, scope and objectives of that expert’s work;
2. The respective roles and responsibilities of the assurance practitioner and that expert;
3. The nature, timing and extent of communication between the assurance practitioner and that expert, including the form of any report to be provided by that expert; and
4. The need for that expert to observe confidentiality requirements.

Evaluating the Adequacy of the Assurance Practitioner's Expert's Work

The assurance practitioner shall evaluate the adequacy of the assurance practitioner’s expert’s work for the assurance practitioner’s purposes, including: (Ref: Para. A138-A143)

1. The relevance and reasonableness of that expert’s findings or conclusions and their consistency with other assurance evidence;
2. If that expert’s work involves assumptions and methods, the relevance and reasonableness of those assumptions and methods in the circumstances; and
3. If that expert’s work involves the use of source data that is significant to that expert’s work, the relevance, completeness and accuracy of that source data.

If the assurance practitioner determines that the work of the assurance practitioner’s expert is not adequate for the assurance practitioner’s purposes, the assurance practitioner shall: (Ref: Para. A144)

1. Agree with that expert on the nature and extent of further work to be performed by that expert; or
2. Perform additional assurance procedures appropriate to the circumstances.

Reference to the Assurance Practitioner's Expert in the Assurance Practitioner's Report

The assurance practitioner shall not refer to the work of an assurance practitioner’s expert in an assurance practitioner’s report unless: (Ref: Para. A145-A146)

1. It is required by law or regulation to do so; or
2. Such reference is relevant to an understanding of a modification to the assurance practitioner’s conclusion.

If the assurance practitioner makes reference to the work of an assurance practitioner's expert in the assurance practitioner's report, the assurance practitioner shall indicate in that report  that the reference does not reduce the assurance practitioner's responsibility for the assurance practitioner's conclusion.

The assurance practitioner shall request written representations from the responsible party: (Ref: Para. A147)

1. That they have fulfilled their responsibility for the preparation of the general purpose water accounting report, including comparative information where appropriate, in accordance with the applicable criteria, as set out in the terms of the engagement;
2. That they have provided the assurance practitioner with all relevant information and access as agreed in the terms of the engagement and reflected all relevant matters in the general purpose water accounting report;
3. Whether they believe the effects of uncorrected misstatements are immaterial, individually and in the aggregate, to the general purpose water accounting report. A summary of such items shall be included in or attached to the written representation;
4. Whether they believe that significant assumptions used in making estimates are reasonable;
5. That they have communicated to the assurance practitioner all deficiencies in internal control relevant to the engagement that are not clearly trivial of which they are aware; and
6. Whether they have disclosed to the assurance practitioner their knowledge of actual, suspected or alleged fraud or non-compliance with law or regulation where the fraud or non-compliance could have a material effect on the general purpose water accounting report.

The date of the written representations shall be as near as practicable to, but not after, the date of the assurance report.

The assurance practitioner shall disclaim a conclusion on the general purpose water accounting report or withdraw from the engagement, where withdrawal is possible under applicable law or regulation, if:

1. The assurance practitioner concludes that there is sufficient doubt about the integrity of the person(s) providing the written representations required by paragraphs 80(a)-80(b) that written representations are not reliable; or
2. The responsible party does not provide the written representations required by paragraphs 80(a)-80(b).

The assurance practitioner shall: (Ref: Para. A148)

1. Consider whether events occurring between the date of the general purpose water accounting report and the date of the assurance report require adjustment of, or disclosure in, the general purpose water accounting report, and evaluate the sufficiency and appropriateness of evidence obtained about whether such events are appropriately reflected in that general purpose water accounting report in accordance with the applicable criteria; and
2. Respond appropriately to facts that become known to the assurance practitioner after the date of the assurance report, that, had they been known to the assurance practitioner at that date, may have caused the assurance practitioner to amend the assurance report.

The assurance practitioner shall determine whether the general purpose water accounting report includes the comparative information required by AWAS 1 and whether such information is appropriately classified. For this purpose, the assurance practitioner shall evaluate whether: (Ref: Para. A149-A156)

1. The comparative information agrees with the amounts and other disclosures presented in the prior period or, when appropriate, has been restated; and (Ref: Para. A149)
2. The water accounting policies reflected in the comparative information are consistent with those applied in the current period or, if there have been changes in water accounting policies, whether those changes have been properly accounted for and adequately presented and disclosed.

If the assurance practitioner becomes aware of a possible material misstatement in the comparative information while performing the current period assurance engagement, the assurance practitioner shall discuss the matter with those person(s) with appropriate responsibilities for, and knowledge of the matters concerned and perform procedures appropriate in the circumstances. (Ref: Para. A150-Al52)

Assurance Reporting and Comparative Information

The assurance practitioner's conclusion shall not refer to the comparative information except in the circumstances described in paragraphs 87, 88 and 90.

If the assurance practitioner’s report on the prior period included a qualified opinion, a disclaimer of opinion, or an adverse opinion and the matter which gave rise to the modification is unresolved, the assurance practitioner shall modify the conclusion on the current period’s general purpose water accounting report. In the Basis for Modification paragraph in the assurance practitioner’s report, the assurance practitioner shall either: (Ref: Para. A153-A154)

1. Refer to both the current period’s figures and the corresponding figures in the description of the matter giving rise to the modification when the effects of the matter on the current period’s figures are material; or
2. In other cases, explain that the assurance conclusion has been modified because of the effects or possible effects of the unresolved matter on the comparability of the current period’s figures and the corresponding figures.

If the assurance practitioner obtains evidence that: (Ref: Para. A155)

1. a material misstatement exists in the prior period general purpose water accounting report on which an unmodified assurance conclusion has been previously issued; and
2. the comparative figures have not been properly restated or appropriate disclosures have not been made,

the assurance practitioner shall express a qualified conclusion or an adverse conclusion in the assurance report on the current period general purpose water accounting report, modified with respect to the comparative information.

Prior Period General Purpose Water Accounting Report Assured by a Predecessor Assurance Practitioner

If the general purpose water accounting report of the prior period was assured by a predecessor assurance practitioner, and the assurance practitioner is not prohibited by law or regulation from referring to the predecessor assurance practitioner’s report on the comparative information and decides to do so, the assurance practitioner shall state in an Other Matter paragraph in the assurance report: (Ref: Para. A156)

1. That the general purpose water accounting report of the prior period was conducted by the predecessor assurance practitioner;
2. The type of conclusion expressed by the predecessor assurance practitioner and, if the conclusion was modified, the reasons therefore; and
3. The date of that report.

Prior Period General Purpose Water Accounting Report Not Assured

If the prior period general purpose water accounting report was not assured, the assurance practitioner shall state in an Other Matter paragraph in the assurance report that the comparative information is not assured. Such a statement does not, however, relieve the assurance practitioner of the requirement to obtain sufficient appropriate evidence that the opening balances do not contain misstatements that materially affect the current period's general purpose water accounting report.

The assurance practitioner shall read other information included in documents containing the general purpose water accounting report and the assurance report thereon to identify material inconsistencies, if any, with the general purpose water accounting report or the assurance report and, if on reading that other information, the assurance practitioner: (Ref: Para. A157-A163)

1. Identifies a material inconsistency between that other information and the general purpose water accounting report or the assurance report; or
2. Becomes aware of a material misstatement of fact in that other information that is unrelated to matters appearing in the general purpose water accounting report or the assurance report;

the assurance practitioner shall discuss the matter with the responsible party and take further action as appropriate.

In documenting the nature, timing and extent of procedures performed, the assurance practitioner shall record: (Ref: Para. A164)

1. The identifying characteristics of the specific items or matters tested;
2. Who performed the engagement work and the date such work was completed; and
3. Who reviewed the engagement work performed and the date and extent of such review.

The assurance practitioner shall document discussions of significant matters with the responsible party and others, including the nature of the significant matters discussed, and when and with whom the discussions took place. (Ref: Para. A164)

Quality Management

The assurance practitioner shall include in the engagement documentation:

1. Issues identified with respect to compliance with relevant ethical requirements and how they were resolved;
2. Conclusions on compliance with independence requirements that apply to the engagement, and any relevant discussions with the assurance practitioner’s firm that support these conclusions;
3. Conclusions reached regarding the acceptance and continuance of client relationships and assurance engagements; and
4. The nature and scope of, and conclusions resulting from, consultations undertaken during the course of the engagement.

Matters Arising after the Date of the Assurance Report

If, in exceptional circumstances, the assurance practitioner performs new or additional procedures or draws new conclusions after the date of the assurance report, the assurance practitioner shall document: (Ref: Para. A165)

1. The circumstances encountered;
2. The new or additional procedures performed, evidence obtained, and conclusions reached, and their effect on the assurance report; and
3. When and by whom the resulting changes to engagement documentation were made and reviewed.

Assembly of the Final Engagement File

The assurance practitioner shall assemble the engagement documentation in an engagement file and complete the administrative process of assembling the final engagement file on a timely basis after the date of the assurance report. After the assembly of the final engagement file has been completed, the assurance practitioner shall not delete or discard engagement documentation of any nature before the end of its retention period. (Ref: Para. A166)

In circumstances other than those envisaged in paragraph 95 where the assurance practitioner finds it necessary to modify existing engagement documentation or add new engagement documentation after the assembly of the final engagement file has been completed, the assurance practitioner shall, regardless of the nature of the modifications or additions, document:

1. The specific reasons for making them; and
2. When and by whom they were made and reviewed.

For those engagements for which an engagement quality review is required in accordance with ASQM 1 or the firm’s policies or procedures, the lead assurance practitioner shall discuss significant matters and significant judgements arising during the engagement with the engagement quality reviewer, and not date the assurance report until completion of that review.^[20] (Ref: Para. A167)

The assurance practitioner shall form a conclusion about whether the assurance practitioner has obtained reasonable or limited assurance, as appropriate, about the water accounting statements, note disclosures and accountability statement included in the general purpose water accounting report. That conclusion shall take into account the requirements of paragraphs 64 and 100-102 of this Standard.

This evaluation shall include consideration of the qualitative aspects of the quantification approaches and reporting practices, including indicators of possible bias in judgements and decisions in the making of estimates and in preparing the general purpose water accounting report,^[21] and whether, in view of the applicable criteria:

1. The quantification approaches and reporting policies selected and applied are consistent with the applicable criteria and are appropriate;
2. Estimates made in preparing the report are reasonable;
3. The information presented is relevant, reliable, complete, comparable and understandable;
4. There is adequate disclosure of the applicable criteria, and other matters, including uncertainties, such that intended users can understand the significant judgements made in its preparation; and (Ref: Para. A22, A168-A170)
5. The terminology used in the general purpose water accounting report is appropriate.

The evaluation required by paragraph 100L-100R shall also include consideration of:

1. The overall presentation, structure and content of the general purpose water accounting report; and
2. When appropriate in the context of the criteria, the wording of the assurance conclusion, or other engagement circumstances, whether the general purpose water accounting report represents the underlying water assets and water liabilities, changes in water assets and water liabilities and water flows in a manner that achieves fair presentation.

The assurance report shall include, at a minimum, the following basic elements: (Ref: Para. A171)

1. A title that clearly indicates the report is an independent assurance report.
2. An addressee.
3. An identification or description of the level of assurance, either reasonable or limited, obtained by the assurance practitioner.
4. Identification of the general purpose water accounting report, including the period(s) it covers, and, if any information in that report is not covered by the assurance practitioner’s conclusion, clear identification of the information subject to assurance as well as the excluded information, together with a statement that the assurance practitioner has not performed any assurance procedures with respect to the excluded information and, therefore that no conclusion on it is expressed. (Ref: Para. A172)
5. Identification of the responsible party and their responsibilities. (Ref: Para. A11-A13)
6. A statement that the quantification of water assets, water liabilities and changes in water assets and water liabilities is subject to inherent uncertainty. (Ref: Para. A48-A52)
7. Identification of the applicable criteria, and;
   1. Identification of how those criteria can be accessed;
   2. If those criteria are available only to specific intended users, or are relevant only to a specific purpose, a statement alerting readers to this fact and that, as a result, the general purpose water accounting report may not be suitable for another purpose. The statement shall also restrict the use of the assurance report to those intended users or that purpose; and (Ref: Para. A173-A174)
   3. If established criteria need to be supplemented by additional note disclosures for those criteria to be suitable, identification of the relevant note(s).
8. A statement that the firm of which the assurance practitioner is a member applies ASQM 1, or other professional requirements, or requirements in law or regulation, that are at least as demanding as ASQM 1. If the assurance practitioner is not a professional accountant, the statement shall identify the professional requirements, or requirements in law or regulation, applied that are at least as demanding as ASQM 1.
9. A statement that the assurance practitioner complies with relevant ethical requirements related to assurance engagements, or other professional requirements, or requirements imposed by law or regulation, that are at least as demanding.^[22]
10. A description of the assurance practitioner’s responsibility, including:
    1. A statement that the engagement was performed in accordance with ASAE 3610 Assurance Engagements on General Purpose Water Accounting Reports or AWAS 2 Assurance Engagements on General Purpose Water Accounting Reports, as applicable.
    2. An informative summary of the work performed as a basis for the assurance practitioner’s conclusion. In the case of a limited assurance engagement, an appreciation of the nature, timing and extent of procedures performed is essential to understanding the practitioner’s conclusion. In a limited assurance engagement, the summary of the work performed shall state that: (Ref: Para. A7 and A175-A177)
       • The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement; and
       • Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
11. The assurance practitioner’s conclusion: (Ref: Para. A178-A191)
    1. In a reasonable assurance engagement, the conclusion shall be expressed in a positive form: or
    2. In a limited assurance engagement, the conclusion shall be expressed in a form that conveys whether, based on the procedures performed and evidence obtained, a matter(s) has come to the assurance practitioner’s attention to cause the assurance practitioner to believe that the general purpose water accounting report is not prepared, in all material respects, in accordance with the applicable criteria.
    3. When the assurance practitioner expresses a modified conclusion, the assurance report shall contain:
       1. A section that provides a description of the matter(s) giving rise to the modification; and
       2. A section that contains the assurance practitioner’s modified conclusion.
12. The assurance practitioner’s signature. (Ref: Para. A192)
13. The date of the assurance report. The assurance report shall be dated no earlier than the date on which the assurance practitioner has obtained the evidence on which the assurance practitioner’s conclusion is based, including evidence that those with the recognised authority have asserted that they have taken responsibility for the general purpose water accounting report.
14. The location where the assurance practitioner practices.

Emphasis of Matter Paragraphs and Other Matter Paragraphs

If the assurance practitioner considers it necessary to: (Ref: Para. A193-A198)

1. Draw intended users’ attention to a matter presented or disclosed in the general purpose water accounting report that, in the assurance practitioner’s judgement, is of such importance that it is fundamental to intended users’ understanding of the general purpose water accounting report (an Emphasis of Matter paragraph); or
2. Communicate a matter other than those that are presented or disclosed in the general purpose water accounting report that, in the assurance practitioner’s judgement, is relevant to intended users’ understanding of the engagement, the assurance practitioner’s responsibilities or the assurance report (an Other Matter paragraph),

the assurance practitioner shall do so in a paragraph in the assurance report, with an appropriate heading, that clearly indicates the assurance practitioner’s conclusion is not modified in respect of the matter.

The assurance practitioner shall communicate to those charged with governance the following matters that come to the assurance practitioner’s attention during the course of the engagement, and shall determine whether there is a responsibility to report them to another party(or parties):

1. Deficiencies in internal control that, in the assurance practitioner’s professional judgement, are of sufficient importance to merit attention;
2. Identified or suspected fraud; and
3. Matters involving non-compliance with law or regulation, other than when the matters are clearly trivial. (Ref: Para. A79)

Assurance Engagements Covering Information in Addition to the General Purpose Water Accounting Report (Ref: PIITll. 6)

 In some cases, the assurance practitioner may perform an assurance engagement on a report that includes information on water assets and water liabilities, but that information does not comprise a general purpose water accounting report as described in paragraph 15(r) of this Standard. In such cases, this Standard may provide guidance for such an engagement.

Procedures for Reasonable Assurance and Limited Assurance Engagements (Ref: Para. 8-10, A82)

Some procedures that are required only for reasonable assurance engagements may nonetheless be appropriate in some limited assurance engagements. For example, although obtaining an understanding of control activities is not required for limited assurance engagements, in some cases, such as when information is recorded, processed, or reported only in electronic form, the assurance practitioner may nonetheless decide that testing controls, and therefore obtaining an understanding of relevant control activities, is necessary for a limited assurance engagement.

Independence (Ref: Para. 11-12, 16)

Relevant ethical requirements related to assurance engagements^[22] set out Independence Standards required to be complied with in relation to these engagements. Compliance with the relevant ethical requirements may potentially be threatened by a broad range of circumstances. Many threats fall into the following categories:

1. Self-interest, for example, undue dependence on total fees from the engaging party or the water report entity.

2. Self-review, for example, performing another service for the engaging party or the water report entity that directly affects the general purpose water accounting report.
3. Advocacy, for example, acting as an advocate on behalf of the engaging party with respect to the interpretation of the applicable criteria.
4. Familiarity, for example, a member of the engagement team ha\·ing a long association, or close or immediate family relationship,  with an employee  of the engaging party who is in a position to exert direct and significant influence over the preparation of the general purpose water accounting report.

5. Intimidation, for example, being pressured to reduce inappropriately the extent of work performed in order to lower fees, or being threatened with withdrawal of the assurance practitioner's registration by a registering authority that is associated with the engaging party's industry group.

In cases when identified threats are not at an acceptable level, relevant ethical requirements require that the threats be addressed by eliminating the circumstances that create the threats, applying safeguards to reduce threats to an acceptable level, or withdrawing from the engagement, where withdrawal is possible under applicable law or regulation.

Limited Assurance -A level of assurance that is meaningful (Ref: Para. 15(c)(i)b.)

Across the range of all limited assurance engagements, what is meaningful assurance can vary from just above assurance that is likely to enhance the intended users' confidence about the subject matter information to a degree that is clearly more than inconsequential to just below reasonable assurance. What is meaningful in a particular engagement represents a judgement within that range that depends on the engagement circumstances, including the information needs of intended users as a group, the criteria, and the underlying subject matter of the engagement.

             Because the level of assurance obtained by the assurance practitioner in limited assurance engagements varies, the assurance practitioner's report contains  an informative  summary  of the procedures performed, recognising that an appreciation of the nature, timing, and extent of procedures performed is essential to understanding the assurance practitioner's conclusion (see paragraphs 103(j)(ii) and Al 75-Al 77).

              Some of the factors that may be relevant in determining what constitutes meaningful assurance in a specific engagement include, for example:

1. The characteristics of the underlying subject matter and the criteria.
2. Instructions or other indications from the engaging party about the nature of the assurance the engaging party is seeking the assurance practitioner to obtain. For example, the terms of the engagement may stipulate particular procedures that the engaging party considers necessary or particular aspects of the subject matter information on which the engaging party would like the assurance practitioner to focus procedures.  However, the assurance practitioner may consider that other procedures are required to obtain sufficient appropriate evidence to obtain meaningful assurance.
3. Generally accepted practice, if it exists, with respect to assurance engagements for the particular subject matter information, or similar or related subject matter information.
4. The information needs of intended users as a group. Generally, the greater the consequence to intended users of receiving an inappropriate conclusion when the subject matter is materially misstated, the greater the assurance that would be needed in order to be meaningful to them. For example, in some cases, the consequence to intended users of receiving an inappropriate conclusion may be so great that a reasonable assurance engagement is needed for the assurance practitioner to obtain assurance that is meaningful in the circumstances.
5. The expectation by intended users that the assurance practitioner will form the limited assurance conclusion on the subject matter information within a short timeframe and at a low cost.

Assurance skills and techniques (Ref: Para. 15(f))

6. Systematic documentation practices and assurance report-writing skills.

Criteria (Ref: Para. 15(k))

Suitable criteria are required for reasonably consistent measurement or evaluation of an underlying subject matter within the context of professional judgement. Without the frame of reference provided by suitable criteria, any conclusion is open to individual interpretation and misunderstanding. The suitability of criteria is context-sensitive, that is, it is determined in the context of the engagement circumstances. Even for the same underlying subject matter there can be different criteria, which will yield a different measurement  or evaluation.  The suitability of criteria is not affected by the level of assurance, that is, if criteria are unsuitable for a reasonable assurance engagement, they are also unsuitable for a limited assurance engagement, and vice versa. Suitable criteria include, when relevant, criteria for presentation and disclosure.

Responsible party (Ref: Para. 15(fl))

The responsible party is defined in relation to the preparation and presentation of the general purpose water accounting report.

In many situations, the responsible party will be accountable for both:

1. Preparation and presentation of the general purpose water accounting report in accordance with AWAS 1; and
2. Managing the water assets and water liabilities of the water report entity.

However, in some situations, the responsible party may not be accountable for managing the water assets and water liabilities of the water report entity. For example, the responsible party may be required to prepare a general purpose water accounting report for a river system comprising several rivers and wetlands that are managed by other parties. The responsible party may require information to be provided by the parties that manage the water assets and water liabilities within the river system to assist the responsible party in preparing the general purpose water accounting report. The responsible party may seek representations from the other parties regarding the information provided.

ASAE 3000 includes requirements that apply to assurance engagements (other than audits or reviews of historical financial information), including engagements in accordance with this Standard. In some cases, this Standard may include additional requirements or application material in relation to those topics.

Skills, Knowledge and Experience (Ref: Para. 17)

3. Understanding water resource management instruments, such as water sharing plans, when relevant.
4. Knowledge of applicable law or regulation, if any, that affect how the water assets, water liabilities and changes in water assets and water liabilities of the water report entity should be reported.
5. Quantification and measurement methodologies for water assets, water liabilities and changes in water assets and water liabilities, including the associated scientific and estimation uncertainties, and alternative methodologies available.

The complexity of assurance engagements with respect to a general purpose water accounting report varies. In some cases, the engagement  may be relatively straightforward, for instance, an assurance engagement involving a water report entity restricted to only water rights (i.e. no physical flows of water). In this case, the engagement  may focus largely on the systems used to record and process any changes to the water rights portfolio (i.e. water made available from annual allocations or used, as measured by meters and shown in water consumption figures identified on invoices). When, however, the engagement is relatively complex, it is likely to require specialist competence in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities, for instance, an assurance engagement involving a water report entity which has surface water and groundwater resources, as well as rights to water from outside the water report entity, with multiple organisations responsible for the management of water resources. Particular areas of expertise that may be relevant in such cases include:

1. Information systems expertise. For example, understanding how water information is generated, including how data is initiated, recorded, processed, corrected as necessary, collated and reported in a general purpose water accounting report.
2. Scientific and engineering expertise. For example:
   1. Mapping the flow of water in and out of a water report entity.
   2. Identifying the effect of uncertainty on the general purpose water accounting report.
   3. Knowledge of the quality control policies and procedures implemented by the responsible party and, where applicable, the party responsible for managing the water assets and water liabilities of the water report entity.
   4. Experience with specific types of water entities and related systems for measuring and reporting water assets, water liabilities and changes in water assets and water liabilities.
   5. The operation of physical meters and other quantification approaches, including modelling and estimation, and the selection of appropriate flow rate factors.

Preconditions for Accepting the Engagement

Determining the Appropriateness of the Subject Matter (Ref: Para. 16)

ASAE 3000 requires the assurance practitioner to determine whether the underlying subject matter is appropriate.^[23] In the case of a general purpose water accounting report, the water report entity's water assets, water liabilities and changes in water assets and water liabilities  are the underlying subject matter of the engagement. That underlying subject matter will be appropriate if, amongst other things, the water report entity's water assets, water liabilities and changes in water assets and water liabilities are capable of consistent quantification using suitable criteria.^[24]

Water volwnes may be quantified by:

1. Measurement (or monitoring) of water volumes and flow rates using metering, continuous water movement monitoring or periodic sampling;
2. Measuring a surrogate activity, such as water consumption;
3. Calculating water assets, water liabilities and changes in water assets and water liabilities using models and incorporating, for example, water report entity-specific flow factors, or average flow factors for a region, industry or process; or
4. Estimating volumes based on other available information and expected volwnes.

Determining the Suitability of the Criteria (Ref: Para. I8(a))

Suitable criteria exhibit the following characteristics: relevance, completeness, reliability, neutrality, and understandability.^[25]

Water Assets and Water Liabilities to be Accounted For (Ref: Para. IS(a)(i))

Determining the water assets and water liabilities to be included in a general purpose water accounting report will depend on various factors, including:

1. The nature of the water report entity, which may range from smaller, less complex entities to larger entities encompassing many water entities across jurisdictional borders.
2. Whether one party is accountable both for preparing and presenting the general purpose water accounting report and for managing the water assets and water liabilities being accounted for. Where the responsible party is accountable for preparing and presenting the general purpose water accounting report, but not accountable for managing some or all of the water assets and water liabilities being accounted for, it relies on the party (or parties) accountable for managing the water assets and water liabilities to provide information on water assets and water liabilities to be included in the general purpose water accounting report.
3. The types of water assets and water liabilities included within the water report entity.

Acceptable Quantification Approaches (Ref: Para. I 8(a)(ii))

AWAS 1 provides for the use of different quantification approaches for the various items presented in the water accounting statements, supported by note disclosures regarding the choice of approaches and whether they are in accordance with relevant quantification standards or established practices, the levels of accuracy or precision achieved by the quantification approaches and the sensitivities associated with the key assumptions used in the qualification approaches. ^[26]

3. How the responsible party determines whether previously reported water assets and water liabilities should be restated.

4. The categorisation of water assets and water liabilities in the general purpose water accounting report.
5. A statement regarding the uncertainties relevant to the quantification of the water assets, water liabilities and changes in water assets and water liabilities, including:
   1. their causes;
   2. how they have been addressed; and
   3. their effects on the general purpose water accounting report.

6. A statement regarding uncertainties relevant to the future prospects note in the general purpose water accounting report.
7. Information about unaccounted-for differences, if any, including the likely reasons for unaccounted-for differences, whether they are considered to be acceptable, the pattern of unaccounted-for differences over time and whether they are expected to continue in future reporting periods.
8. Changes, if any, in the matters mentioned in this paragraph or in other matters that materially affect the comparability of the general purpose water accounting report with a prior period(s).
9. Water assets and water liabilities relevant to the water report entity that have been excluded from the general purpose water accounting report, if any, and the reasons for their exclusion.

Who Developed the Criteria (Ref: Para. 18(b)(iii))

Where AWAS 1 is not used as the basis for preparing the general purpose water accounting report, or where AWAS 1 is supplemented by other criteria, it may not be clear who developed the criteria unless it is stated in the explanatory notes to the general purpose water accounting report.

The Responsible Party's Records (Ref: Para. lB(b)(iv))

As noted in paragraph A62(b), for some engagements concerns about the condition and reliability of the responsible party's records may cause the assurance practitioner to conclude that it is unlikely that sufficient appropriate evidence will be available to support an unmodified conclusion on the general purpose water accounting report. This may occur when the responsible party has little experience with the preparation of general purpose water accounting reports.

Agreement on the Terms of the Engagement (Ref: Para. 16, 20)

             ASAE 3000 requires that the assurance practitioner not agree to a change in the terms of the engagement where there is no reasonable justification for doing so.^[27] A request to change the scope of the engagement may not have a reasonable justification when, for example, the request is made to exclude certain water assets and water liabilities from the scope of the engagement because of the likelihood that the assurance practitioner's conclusion would be modified.

Smaller engagements or more straightforward engagements (see paragraph Al6) may be conducted by a very small engagement team. With a smaller team, coordination of, and communication between, team members is easier. Establishing the overall engagement strategy for a smaller engagement, or for a more straightforward engagement, need not be complex or time-consuming exercise.  For example, a brief memorandum, based on discussions with the responsible party, may serve as the documented engagement strategy if it covers the matters noted in paragraph 24.

The assurance practitioner may decide to discuss elements of planning with the responsible party when determining the scope of the engagement or to facilitate the conduct of the engagement (for example, to coordinate some of the planned procedures with the work of the entity's personnel). Although these discussions often occur, the overall engagement strategy and the engagement plan remain the assurance practitioner's responsibility. When discussing matters included in the overall engagement strategy or engagement plan, care is required in order not to compromise the effectiveness of the engagement. For example, discussing the nature and timing of detailed procedures with the responsible party may compromise the effectiveness of the engagement by making the procedures too predictable.

The performance of an assurance engagement is an iterative process. As the assurance practitioner performs planned procedures, the evidence obtained may cause the assurance practitioner to modify the nature, timing or extent of other planned procedures. In some cases, information may come to the assurance practitioner's attention that differs significantly from that expected at an earlier stage of the engagement. For example, systematic errors discovered when performing procedures in one location may indicate that it is necessary to visit additional locations.

Planning to Use an Assurance Practitioner's Expert or Another Assurance Practitioner (Ref: Para. 24(e})

The engagement may be performed by a multi-disciplinary team that includes one or more experts, particularly on relatively complex engagements when specialist competence in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities is likely to be required (see paragraph A16).

 The work of another assurance practitioner may be used in relation to, for example, a location other than where the general purpose water accounting report is prepared. Relevant considerations when the engagement team plans to request another assurance practitioner to perform work on information to be included in the general purpose water accounting report may include:

1. Whether the other assurance practitioner understands and complies with the ethical requirements that are relevant to the engagement and, in particular, is independent.
2. The other assurance practitioner's professional competence.
3. The extent of the engagement team's involvement in the work of the other assurance practitioner.
4. Whether the other assurance practitioner operates in a regulatory environment that actively oversees that assurance practitioner.

Determining Materiality When Planning the Engagement (Ref: Para. 25-26)

1. Misstatements, including omissions, are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence relevant decisions of users taken on the basis of the general purpose water accounting report;

2. Judgements about materiality are made in light of surrounding circumstances, and are affected by the size or nature of a misstatement, or a combination of both; and

3. Judgements about matters that are material to intended users of the general purpose water accounting report are based on a consideration of the common information needs of intended users as a group. Unless the engagement has been designed to meet the particular information needs of specific users, the possible effect of misstatements on specific users, who information needs may vary widely, is not ordinarily considered.

The discussion in AWAS 1, together with the characteristics described in paragraph A32, provide a frame of reference to the assurance practitioner in determining materiality for the engagement.

Materiality relates to the water assets and water liabilities covered by the assurance practitioner's conclusion. Therefore, materiality is set in relation to the water accounting statements, note disclosures and the accountability statement and not the contextual statement.

The assurance practitioner's determination of materiality is a matter of professional judgement, and is affected by the assurance practitioner's perception of the common information needs of intended users as a group.

In this context, it is reasonable for the assurance practitioner to assume that intended users:

1. Have a reasonable knowledge of water accounting and reporting, and a willingness to study the information in the general purpose water accounting report with reasonable diligence;

2. Understand that the general purpose water accounting report is prepared and assured to levels of materiality, and have an understanding of any materiality concepts included in the applicable criteria;

3. Understand that the quantification of water assets, water liabilities and changes  in water assets and water liabilities involves uncertainties (see paragraphs A48-A53); and
4. Make reasonable decisions on the basis of the information in the general purpose water accounting report.

6. The responsible party, for fulfilling its accountability in relation to preparation and presentation of the general purpose water accounting report.
7. Regulators and policy makers. Their information needs may relate to monitoring the disclosure regime with a view to introducing a regulation, or a broad range of government policy decisions related to water use, usually based on aggregated information.

The assurance practitioner may not be able to identify all those who will read the assurance report, particularly where there are a large number of people who have access to it. In such cases, particularly where possible users are likely to have a broad range of interests with respect to water assets, water liabilities and changes in water assets and water liabilities, intended users may be limited to major stakeholders with significant and common interests. Intended users may be identified in different ways, for example, by agreement between the assurance practitioner and the engaging party, or by law or regulation.

While judgements about materiality are made in light of surrounding circumstances, and are affected by both quantitative and qualitative factors, it should be noted, that decisions regarding materiality are not affected by the level of assurance, that is, materiality for a reasonable assurance engagement is the same as for a limited assurance engagement.

Quantitative factors may involve:

1. Applying a percentage to a chosen benchmark as a starting point in determining materiality. Factors that may affect the identification of an appropriate benchmark and percentage include:
   1. The elements of the general purpose water accounting report (for example, surface water assets, groundwater assets, claims to water, water liabilities, net water assets, changes in water assets and water liabilities). A benchmark that may be appropriate, depending on the circumstances, is total water assets.
   2. How the general purpose water accounting report presents relevant information, for example, whether it includes a comparison of water assets, water liabilities and changes in water assets and water liabilities with a prior period(s), in which case determining materiality in relation to the comparative information may be a relevant consideration.

1. 3. The relative variability of the benchmark. For example, if water assets, water liabilities and changes in water assets and water liabilities vary significantly from period to period, it may be appropriate to set materiality relative to the lower end of the fluctuation range even if the current period is higher.

2. The volume of a particular type of water asset or water liability or the nature of a particular disclosure. In some cases, there may be particular types of water assets and water liabilities or disclosures for which misstatements of lesser or greater amounts than materiality for the general purpose water accounting report as a whole is appropriate. For example, the assurance practitioner may consider it appropriate to set a lower or greater materiality for a particular type of water asset, such as dead water storage, or for water assets from a particular source, such as water from unlicensed storages for a water supply authority.
3. The requirements of the applicable criteria, such as AWAS 1.

3. Whether there are one or more types of water assets, water liabilities, changes in water assets and water liabilities or disclosures on which the attention of the intended users tends to be focused, for example, for certain water report entities, the way in which the water assets are utilised to provide water for environmental benefit may be particularly important.

4. The nature of the water report entity.

5. The industry and the economic and regulatory environment in which the water report entity operates.

Revision as the Engagement Progresses (Ref: Para. 27)

Materiality may need to be revised as a result of a change in circumstances during the engagement (for example, unusually dry or wet climatic conditions that significantly impact water assets or water liabilities, disruption to operations resulting from damage to critical infrastructure or disposal of a major part of the business of the water report entity), new information, or a change in the assurance practitioner's understanding of the water report entity and its operations as a result of performing procedures. For example, it may become apparent during the engagement that actual water assets and water liabilities are likely to be substantially different from those used initially to determine materiality. If during the engagement the assurance practitioner concludes that a lower materiality for the general purpose water accounting report (and, if applicable, materiality level or levels for particular types of water assets or water liabilities or disclosures) than that initially determined is appropriate, it may be necessary to revise performance materiality, and the nature, timing and extent of the further procedures.

The assurance practitioner uses professional judgement to determine the extent of the understanding and the nature, timing and extent of procedures to identify and assess risks of material misstatement that are required to obtain reasonable or limited assurance, as appropriate. The assurance practitioner's primary consideration is whether the understanding that has been obtained and the identification and assessment of risks are sufficient to meet the relevant objectives stated in this Standard.

The depth of the understanding that is required by the assurance practitioner is less than that possessed by the responsible party, and both the depth of the understanding and the nature, timing and extent of procedures to identify and assess risks of material misstatement are less for a limited assurance engagement than for a reasonable assurance engagement.

Obtaining an understanding and identifying and assessing risks of material misstatement is an iterative process. Procedures to obtain an understanding of the water report entity and its circumstances and to identify and assess risks of material misstatement by themselves do not provide sufficient appropriate evidence on which to base the assurance conclusion.

Obtaining an Understanding of the Water Report Entity and Its Circumstances

Water Management Objectives and Strategies (Ref: Para. 28(c))

Consideration of the water management strategy, if any, and associated economic, regulatory, physical and reputational risks, may assist the assurance practitioner to identify risks of material misstatement.

Use of a Management's Expert by the Responsible Party (Ref: Para. 28(e))

When the responsible party uses a management's expert because expertise in a field other than water accounting is needed to prepare the general purpose water accounting report, the risks of material misstatement may increase because this may  indicate some complexity, or because  the responsible party may not possess knowledge of the field of expertise. Alternatively, provided the responsible party implements relevant controls around using the work of a management's expert, the risks of material misstatement may decrease.

Significant Events (Ref: Para. 28(t))

Significant events that impact the information inc1uded in the general purpose water accounting report may include unexpected events such as damage to critical infrastructure or unseasonal flooding, or planned events, for example, as part of a maintenance schedule.

Uncertainty (Ref: Para: 28(g), 103(f))

The quantification process for water assets and water liabilities can rarely be 100% accurate due to:

1. Scientific uncertainty: This arises because of incomplete scientific knowledge about the measurement of water volumes. For example, the quantification rate of the movement of water through a system, via modelling, is subject to uncertainty due to incomplete scientific knowledge of the process. The degree to which scientific uncertainty affects the quantification of reported water assets, water liabilities and changes in water assets and water liabilities is beyond the control of the responsible party or those providing information to the responsible party. However, the potential for scientific uncertainty to result in unreasonable variations in reported water assets, water liabilities and changes in water assets and water liabilities can be negated by the use of criteria that stipulate particular scientific assumptions  to be used in preparing the general purpose water accounting report, or particular factors that embody those assumptions; and

2. Estimation (or measurement) uncertainty: This results from the measurement and calculation processes used to quantify water assets, water liabilities and changes in water assets and water liabilities within the bounds of existing scientific knowledge or the practicality of how many measurement points can be afforded. Estimation uncertainty may relate to the data on which an estimate is based (for example, it may relate to uncertainty inherent in measurement instruments used), or the method, including where applicable the model, used in making the estimate (sometimes known as parameter and model uncertainty, respectively).  The degree of estimation uncertainty  is often controllable by the responsible party or those providing information to the responsible party. Reducing the degree of estimation uncertainty may involve greater cost.

The fact that quantifying water assets, water liabilities and changes in water assets and water liabilities is subject to uncertainty does not mean that water assets and water liabilities are inappropriate as a subject matter. As long as the assumptions and models are reasonable in the circumstances and adequately disc1osed, the general purpose water accounting report will ordinarily be capable of being subjected to an assurance engagement.

A discussion in the notes to the general purpose water accounting report of the nature, causes, and effects of the uncertainties that affect the general purpose water accounting report alerts intended users to the uncertainties associated with the quantification of water assets, water liabilities and changes in water assets and water liabilities. This may be particularly important where the general purpose water accounting report may be available to a broad range of users.

Certain disclosures in a general purpose water accounting report may be subject to greater uncertainty, such as future prospects of the water report entity, contingent water assets, contingent water liabilities and unaccounted-for differences. Accordingly, the future prospects note should contain sufficient information to enable users to understand how the responsible party determined both the water expected to be available and water liabilities and future water commitments  expected  to be settled within twelve months of the reporting date, and the level of uncertainty associated with these disclosures. Similarly, where there is an unaccounted-for difference, a note disclosure should provide information relevant to users in understanding this disclosure, for example, the possible causes of the unexplained difference, whether it is acceptable in the context of the water report entity, the pattern of unaccounted-for differences over time and whether they are expected to continue in future reporting periods.

             In some cases, however, the assurance practitioner may decide that it is inappropriate to undertake an assurance engagement if the impact of uncertainty on information in the general purpose water accounting report is very high. This may be the case when, for example, a significant proportion of the reported water assets, water liabilities and changes in water assets and water liabilities are from sources that are not monitored and estimation methods are not sufficiently sophisticated. It should be noted that decisions whether to undertake an assurance engagement in such circumstances are not affected by the level of assurance, that is, if it is not appropriate for a reasonable assurance engagement, it is also not appropriate for a limited assurance engagement, and vice versa.

Procedures to Obtain an Understanding and to Identify and Assess Risks of Material Misstatement (Ref: Para. 29)

Although the assurance practitioner is required to perform all the procedures in paragraph 29 in the course of obtaining the required understanding of the water report entity, the assurance practitioner is not required to perform all of them for each aspect of that understanding.

Analytical Procedures (Ref; Para. 29(b))

Analytical procedures performed to obtain an understanding of the water report entity and its circumstances and to identify and assess risks of material misstatement may identify aspects of the water report entity of which the assurance practitioner was unaware and may assist in assessing the risks of material misstatement in order to provide a basis for designing and implementing responses to the assessed risks.  Analytical procedures  may include, for example, comparing water assets and water liabilities of a water report entity from one period to the next, or with a similar water report entity.

Analytical procedures may help identify the existence of unusual events and amounts, ratios, and trends that might indicate matters that have implications for the engagement. Unusual or unexpected relationships that are identified may assist the assurance practitioner in identifying risks of material misstatement.

However, when such analytical procedures use data aggregated at a high level (which may be the situation with analytical procedures performed to obtain an understanding of the water report entity and its circumstances and to identify and assess risks of material misstatement), the results of those analytical procedures only provide a broad initial indication about whether a material misstatement may exist.  Accordingly, in such cases, consideration of other evidence that has been gathered when identifying the risks of material misstatement together with the results of such analytical procedures may assist the assurance practitioner in understanding and evaluating the results of the analytical procedures.

Obsentation and Inspection (Ref: Para. 29(c))

Observation consists of looking at a process or procedure, or control activities, being performed by others. Observation provides evidence about the performance of a process or procedure, or control activity, but is limited to the point in time at which the observation takes place, and by the fact that the act of being observed may affect how the process or procedure, or control activity, is performed.

Inspection invokes:

1. Examining records or documents, whether internal or external, in paper form, electronic form, or other media, for example calibration records of a monitoring device. Inspection of records and documents provides evidence of varying degrees of reliability, depending on their nature and source and, in the case of internal records and documents, on the effectiveness of the controls over their production; or
2. A physical examination of, for example, a calibrating device.

Observation and inspection  may support enquiries  of the responsible  party and others, and may also provide information about the water report entity and its circumstances. Examples of such procedures include observation or inspection of the following:

1. The water report entity's operations. Observing processes and equipment, including monitoring equipment.

2. Documents (such as legislation or water resource management instruments), records (such as calibration records and results from metering equipment), and manuals detailing information collection procedures and internal controls.
3. Reports prepared for the responsible party, such as internal or external reports with respect to the water information management systems or water accounting and reporting systems.
4. Reports prepared by the responsible party, such as quarterly management reports or minutes of board of directors' meetings.

Obtaining an Understanding of Internal Control (Ref: Para. 30L-3 IR)

In a limited assurance engagement, the assurance practitioner is not required to obtain an understanding of an of the components of internal control relevant to water accounting and reporting as is required in a reasonable assurance engagement. In addition, the assurance practitioner is not required to evaluate the design of controls and determine whether they have been implemented. Therefore, in a limited assurance engagement, while it may often be appropriate to enquire of the responsible party about control activities and monitoring of controls relevant to water accounting and reporting, it will often not be necessary to obtain a detailed understanding of these components of internal control.

The assurance practitioner's understanding of relevant components of internal control may raise doubts about whether sufficient appropriate evidence is available for the assurance practitioner to complete the engagement. For example (see also paragraphs A63-A64, A84-A85, A89):

1. Concerns about the integrity of those preparing the general purpose water accounting report may be so serious as to cause the assurance practitioner to conclude that the risk of misrepresentation in the general purpose water accounting report is such that an engagement cannot be conducted.
2. Concerns about the condition and reliability of the responsible party's records may cause the assurance practitioner to conclude that it is unlikely that sufficient appropriate evidence will be available to support an unmodified conclusion on the general purpose water accounting report.

Control Activities Relevant to the Engagement (Ref: Para. 30R(d))

The assurance practitioner's judgement about whether particular control activities are relevant to the engagement may be affected by the level of sophistication, documentation and formality of the water information system, including the related business processes, relevant to water accounting and reporting. As water accounting and reporting evolves, it can be expected that so too will the level of sophistication, documentation and formality of water information systems and related control activities.

Other Procedures to Obtain an Understanding and to Identify and Assess the Risks of Material Misstatement

Other Engagements Performed (Ref: Para. 32)

Information obtained from other engagements performed relating to the water report entity may relate to, for example, aspects of the water report entity's control environment.

Performing Procedures at Other Locations (Ref: Para. 36)

Performing observation and inspection, as well as other procedures, at locations other than where the general purpose water accounting report is prepared (often referred to as a "site visit") may be important in building on the understanding of the responsible party and the water report entity that the assurance practitioner develops. Because the assurance practitioner's understanding of the responsible party and the water report entity and identification and assessment of risks of material misstatement can be expected to be more comprehensive for a reasonable assurance engagement than for a limited assurance engagement, the number of locations at which procedures are performed in the case of a reasonable assurance engagement will ordinarily be greater than in the case of a limited assurance engagement.

Performing procedures at other locations (or having another assurance practitioner perform such procedures on behalf of the assurance practitioner) may be done as part of planning, when performing procedures to identify and assess risks of material misstatement, or when responding to assessed risks of material misstatement. Performing procedures at significant locations is often particularly important for an engagement being undertaken for the first time when considering the completeness of water assets, water liabilities and changes in water assets and water liabilities included in the general purpose water accounting report, and when establishing whether the data collection and processing systems, and estimation techniques, are appropriate relative to the subject matter and related uncertainties.

As noted in paragraph A66, performing procedures at other locations may be important in building on the understanding of the responsible party and the water report entity that the assurance practitioner develops by performing procedures at the location where the general purpose water accounting  report is prepared.  For many reasonable assurance  engagements, the assurance practitioner will also judge it necessary to perform procedures at each significant location to respond to assessed risks of material misstatement. For a limited assurance engagement, a meaningful level of assurance may not be able to be obtained without the assurance practitioner having performed procedures at a selection of significant locations.

Where the responsible party or the water report entity has significant locations and the assurance practitioner determines that effective and efficient procedures cannot be performed at those locations by the assurance practitioner (or another assurance practitioner on their behalf), alternative procedures may include one or more of the following:

1. Reviewing source documents, water flow diagrams and other hydrological modelling systems.
2. Analysing questionnaire responses from the locations.
3. Inspecting satellite imagery of the locations.

2. The number, ease of access to and size of locations, and their contribution to overall water assets, water liabilities and changes in water assets and water liabilities.
3. Whether different processes, or processes using different technologies are used at the locations. Where this is the case, it may be appropriate to perform  procedures at or for a selection of locations using different processes or technologies.
4. The methods used at different locations to gather information about water assets, water liabilities and changes in water assets and water liabilities.
5. The experience of relevant staff associated with different locations. 
6. Varying the selection of locations over time.

Internal Audit (Ref: Para. 37)

The internal audit function is likely to be relevant to the engagement if the nature of the internal audit function's responsibilities and activities are related to water accounting and reporting and the assurance practitioner expects to use the work of the internal audit function to modify the nature or timing, or reduce the extent, of procedures to be performed.

Identifying and Assessing Risks of Material Misstatement

Risks of Material Misstatement at the General Purpose Water Accounting Report Level (Ref: Para. 38L(a)--38R(a))

Risks of material misstatement at the general purpose water accounting report level refer to risks that relate pervasively to the general purpose water accounting report as a whole. Risks of this nature are not necessarily risks identifiable with a specific type of water asset or water liability or disclosure level. Rather, they represent circumstances that may increase the risks of material misstatement more generally, for example, through management override of internal control. Risks of material misstatement at the general purpose water accounting

report level may be especially relevant to the assurance practitioner's consideration of the risks of material misstatement arising from fraud.

7. Misleading presentation of information in the general purpose water accounting report, for example, unduly highlighting particularly favourable data or trends.

8. Inconsistent quantification approaches and reporting policies, including different methods for determining which water assets and water liabilities are included in the general purpose water accounting report.
9. Errors in unit conversion when consolidating information from locations.
10. Inadequate disclosure of scientific uncertainties and key assumptions in relation to estimates.

The Use of Assertions (Ref: Para. 38L(b) and 38R(b))

 Assertions are used by the assurance practitioner in a reasonable assurance engagement, and may be used in a limited assurance engagement, to consider the different types of potential misstatements that may occur.

1. 3. Classification and understandability-information about water assets, water liabilities, changes in water assets, changes in water liabilities and water flows is appropriately presented and described, and disclosures are clearly expressed.
   4. Accuracy and quantification-quantification approaches and related information are appropriately disclosed.
   5. Consistency-quantification policies are consistent with those applied in the prior period, or changes are justified and have been properly applied and adequately disclosed; and comparative information, if any, is as reported in the prior period or has been appropriately restated.

Reliance on Internal Control (Ref: Para. 38R)

If the assurance practitioner's assessment of risks of material  misstatement  at the assertion level includes an expectation that the controls are operating effectively (that is, the assurance practitioner intends to rely on the operating effectiveness of controls in determining the nature, timing and extent of other procedures), the assurance practitioner is required by paragraph 43R to design and perform tests of the operating effectiveness of those controls.

Causes of Risks of Material Misstatement (Ref: Pa1a. 39)

Fraud (Ref: Para. 33, 39(a))

Misstatements in the general purpose water accounting report can arise from either fraud or error. The distinguishing factor between fraud and error is whether the underlying action that results in the misstatement of the general purpose water accounting report is intentional or unintentional.

Incentives for intentional misstatement of the general purpose water accounting report may arise if, for example, those who are directly involved with, or have the opportunity to influence, the water accounting and reporting process have a significant portion of their compensation contingent upon achieving aggressive water management targets. Other incentives to either under or overstate water assets and water liabilities may result from the water management strategy, if any, and associated economic, regulatory, physical and reputational risks.

Although fraud is a broad legal concept, for the purposes of this Standard, the assurance practitioner is concerned with fraud that causes a material misstatement in the general purpose water accounting report. Although the assurance practitioner may suspect or, in rare cases, identify the occurrence of fraud, the assurance practitioner does not make legal determinations of whether fraud has actually occurred.

Non-Compliance with Law and Regulation (Ref: Para. 39(b), lOS(c))

regulations). Planning and performing an engagement with professional scepticism, as required by paragraph 21 of this Standard, is important in the context of remaining alert to the possibility that procedures applied for the purpose of forming a conclusion on the general purpose water accounting report may bring instances of identified or suspected non-compliance with such law or regulation to the assurance practitioner's attention.

Other Causes of Risks of Material Misstatement (Ref: Para. 39)

1. 1. Greater management intervention to specify the quantification approaches or reporting treatment.
   2. Greater manual intervention for data collection and processing.
   3. Complex calculations or quantification approaches and reporting principles.
   4. The nature of non-routine water assets, water liabilities and changes in water assets and water liabilities, which may make it difficult for the responsible party to implement effective controls over the risks.
   5. Quantification approaches and reporting principles for estimates may be subject to differing interpretation.
   6. Required judgements may be subjective or complex.

8. In the absence of any evidence of potential causes for change to unaccounted-for differences, an unusually large deviation in an unaccounted-for difference may be an indicator that the systems and processes in place for water accounting and reporting are either not operating effectively or not fit for purpose.

1. Where the source data used in quantification is not maintained by the responsible party, or where quantification approaches commonly in use are imprecise or lead to large variations in reported water assets and water liabilities.

7. Matters that the assurance practitioner may consider in obtaining an understanding of how the responsible party makes significant estimates and the data on which they are based include, for example:
   1. An understanding of the data on which estimates are based;
   2. The method, including where applicable the model, used in making estimates;
   3. Relevant aspects of the control environment and water information system;
   4. Whether the responsible party has used a management's expert;
   5. The assumptions underlying estimates;

1. 6. Whether there has been or ought to have been a change from the prior period in the methods for making estimates and, if so, why; and
   7. Whether and, if so, how the responsible party has assessed the effect of estimation uncertainty on the general purpose water accounting report, including:

0                      Whether and, if so, how the responsible party has considered alternative assumptions or outcomes by, for example, performing a sensitivity analysis to determine the effect of changes in the assumptions on an estimate;

0                      How the responsible party determines the estimate when analysis indicates a number of outcome scenarios; and

0                Whether the responsible party monitors the outcome of estimates made in the prior period, and whether it has appropriately responded to the outcome of that monitoring procedure.

Examples of other factors that may lead to risks of material misstatement include:

1. Human error in the quantification of water assets, water liabilities and changes in water assets and water liabilities, which may be more likely to occur if personnel are unfamiliar with, or not well-trained regarding, water quantification processes or data recording.

2. Undue reliance on a poorly designed water information system, which may have few effective controls, for example, the use of spreadsheets without adequate controls.
3. Manual adjustment of otherwise automatically recorded data, for example, manual input may be required if a flow meter is not working.
4. Significant external developments such as heightened public scrutiny of a particular water report entity.

Limited and Reasonable Assurance Engagements (Ref: Para. 8-10, 15(c)(i), 40-46R, 47L-48R, 54, A2)

3. In a reasonable assurance engagement, analytical procedures performed in response to assessed risks of material misstatement involve developing expectations regarding recognised volumes or note disclosures that are sufficiently precise to identify material misstatements. In a limited assurance engagement, analytical procedures may be designed to support expectations regarding the direction of trends, relationships and ratios rather than to identify misstatements with the level of precision expected in a reasonable assurance engagement. ^[29]

Further, when significant fluctuations, relationships or differences are identified, appropriate evidence in a limited assurance engagement may be obtained by making enquiries of management and those charged with governance and considering responses received in the light of known engagement circumstances, without obtaining additional evidence as is required by paragraph 48R in the case of a reasonable assurance engagement.

In addition, when undertaking analytical procedures in a limited assurance engagement the assurance practitioner may, for example:

1. 1. Use data that is more highly aggregated, for example, data at a regional level rather than at one location, or monthly data rather than weekly data.
   2. Use data that has not been subjected to separate procedures to test its reliability to the same extent as it would be for a reasonable assurance engagement.

Overall Responses to Assessed Risks of Material Misstatement (Ref: Para. 40)