Special Purpose Engagements

Includes: Terms of Engagement, Reporting Requirements, Format of Reporting Requirements

Terms of Engagement


APRA may require the RSE licensee, by notice in writing, to appoint an auditor, who may be the existing RSE auditor or another auditor, as specified in APRA’s notice, to provide a report on a particular aspect of the RSE licensee’s business operations, prudential requirements or the risk management framework.


Following the determination by APRA of the specific area to be examined, the RSE auditor, APRA and the RSE licensee agree on the terms of the engagement in accordance with the requirements of applicable AUASB Standards. These arrangements are legally binding and include the required terms of engagement specified in SPS 310.


The RSE auditor accepts the engagement only when the RSE auditor is satisfied that the RSE auditor and the engagement team, if applicable, have met the relevant ethical requirements relating to the assurance engagement. The concept of independence is important to the RSE auditor’s compliance with the fundamental ethical principles of integrity and objectivity and the RSE auditor must be able to meet the independence requirements stipulated under both SPS 510 and ASA 102 Compliance with Ethical Requirements when Performing Audits, reviews and Other Assurance Engagements.


An engagement letter (or other suitable form) helps to avoid misunderstandings with respect to the engagement and confirms both the RSE licensee’s and the RSE auditor’s understanding of the terms of the engagement, and the RSE auditor’s acceptance of the appointment. Both parties sign the engagement letter to acknowledge that it is a legally binding contract.


To ensure that there is a clear understanding regarding the terms of the engagement, the following are examples of matters to be agreed:

  • APRA is to identify the scope of the RSE licensee’s business operations, risk management framework or prudential requirements to be the subject of the engagement.
  • The RSE auditor, APRA and the RSE licensee are to agree on the objectives of the engagement, key features and criteria of the area(s) to be examined, and the period to be covered by the engagement.
  • APRA is to identify clearly the level of assurance required, that is, limited or reasonable assurance.
  • The format of reports required (for example, long and/or short form reports) and other communication of results of the engagement.
  • Responsibility of TCWG for the subject matter of the engagement.
  • Understanding of the inherent limitations of an assurance engagement.

Reporting Requirements


The RSE auditor appointed for a special purpose engagement under SPS 310 must provide limited assurance on the matters upon which the RSE auditor is required to report unless otherwise determined by APRA and advised to the RSE licensee in writing.


The RSE auditor appointed for a special purpose engagement must submit, within three months of the date of the notice commissioning the report, the RSE auditor’s report simultaneously to APRA and to the Board of the RSE licensee, unless otherwise determined by APRA.

Format of Reporting Requirements


The format of the special purpose assurance report may vary depending on the type of engagement: that is, reasonable or limited assurance, as well as the subject matter and the findings. The RSE auditor has regard to the requirements, guidance and illustrative examples of reports provided in relevant AUASB Standards – Auditing Standards, ASREs and ASAEs, as applicable, when preparing the special purpose assurance report.


AUASB Standards do not require a standardised format for special purpose reporting under SPS 310. Instead, these Standards identify the basic elements to be included in the RSE auditor’s report. Ordinarily, the RSE auditor adopts a long form style of reporting and the report may include a description of the terms of the engagement, materiality considerations applied, the assurance approach and an other matter paragraph which may include - findings relating to particular aspects of the engagement and, in some cases, recommendations.


The RSE auditor’s assurance report is to be restricted to the parties that have agreed to the terms of the special purpose engagement, namely the RSE licensee and APRA, as well as other parties with whom APRA is lawfully entitled to share the information, by means of an emphasis of matter paragraph required by ASA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report.