Agreeing the Terms of Engagement


The RSE auditor and the RSE licensee agree on the terms for each discrete engagement as outlined under SPS 310, paragraph 19. Such terms may be detailed in one engagement letter or other suitable form of written contract. The RSE auditor has regard to ASA 210 Agreeing the Terms of Audit Engagements when agreeing the terms of the engagement with the RSE licensee.


It is noted that the appointment of the RSE auditor by the RSE licensee may cover more than one year of income in which case it would be prudent for the RSE licensee to confirm the appointment of the RSE auditor annually.


It is important that TCWG of the RSE licensee are aware of the RSE auditor’s obligations referred to in SPS 310 and of the implications for confidentiality and restriction of distribution of the auditor’s report beyond those users for which the RSE auditor reports were primarily prepared being the RSE licensee and APRA. It is important also that the engagement letter includes a reference to the responsibility of TCWG of the RSE licensee to establish and maintain effective internal control to meet its APRA reporting requirements.


The engagement letter explains that any special purpose engagement of specific matters relating to the RSE licensee’s business operations, prudential requirements or the risk management framework, will constitute a separate engagement(s) and that the details of such engagement(s) will be the subject of a separate engagement letter(s).


An example engagement letter to reflect APRA reporting requirements as per SPS 310 is set out in Appendix 2 to this Guidance Statement.