In respect of assurance engagements involving: (Ref: Para. A4)

1. reasonable or limited assurance on non‑historical financial information, the assurance practitioner shall not represent compliance with this ASAE unless the assurance practitioner has complied with the requirements of both this ASAE and ASAE 3000; and/or
2. limited assurance on historical financial information, the assurance practitioner shall not represent compliance with this ASAE unless the assurance practitioner has complied with the requirements of both this ASAE and ASRE 2405.

The assurance practitioner shall have an understanding of the entire section(s) of this ASAE that is applicable in the engagement circumstances, including the application and other explanatory material, to understand its objectives and to apply its requirements properly.

The assurance practitioner shall comply with relevant ethical requirements relating to assurance engagements, including those pertaining to independence, or other professional requirements, or requirements imposed by law or regulation, that are at least as demanding and implement the firm's policies or procedures applicable to the individual engagement in accordance with ASA 102.[22]

The assurance practitioner shall design, implement and operate a system of quality management in accordance with ASQM 1 or other professional requirements, or requirements in law or regulation, that are at least as demanding as ASQM 1.[23]

The assurance practitioner shall plan and perform the engagement with professional scepticism, recognising that circumstances may exist that causes the financial information to be materially misstated.

The assurance practitioner shall exercise professional judgement in planning and performing assurance engagements involving reporting on financial information.

Where in rare and exceptional circumstances, factors outside the assurance practitioner’s control prevent the assurance practitioner from complying with an essential procedure contained within a relevant requirement[24] in this ASAE, the assurance practitioner shall:

1. if possible, perform appropriate alternative procedures; and
2. document in the working papers:
   1. the circumstances surrounding the inability to comply;
   2. the reasons for the inability to comply; and
   3. the justification of how the alternative procedures achieve the objective(s) of the requirement.

When the assurance practitioner is unable to perform the appropriate alternative procedures, the assurance practitioner shall consider the implications for the engagement. (Ref: Para. A5)

Preconditions for Acceptance (Ref: Para. A6‑A7)

In order to establish whether the preconditions for the engagement are present, the assurance practitioner shall obtain agreement from the responsible party that they:

1. understand and accept the terms of the assurance engagement, including the assurance practitioner’s reporting responsibilities and the type(s) of assurance to be expressed;
2. acknowledge and understand their responsibility for:
   1. the selection of the financial information, including whether it contains comparatives;
   2. the preparation of the financial information in accordance with the stated basis of preparation;^[25],^[26]
   3. determining the applicable time period to be covered by the financial information;
   4. the determination, selection, development, adequate disclosure and consistent application, of the stated basis of preparation in the document; the contents, preparation and issuance of the document^[27] in which the financial information is contained;
   5. complying with the requirements of all applicable laws and regulations in the preparation of the financial information and the document;^[28] and
   6. such internal control as is determined to be necessary to enable the preparation of financial information that is free from material misstatement; and
3. will provide the assurance practitioner with:
   1. unrestricted access to all requested information relevant to the financial information, where possible;
   2. unrestricted access to those persons within the entity or the responsible party’s experts, from whom the assurance practitioner determines it is necessary to obtain evidence, where possible;
   3. a listing of all known uncorrected misstatements in the financial information, together with an acknowledgement that the responsible party is responsible for confirming that such misstatements are immaterial; and
   4. written representations covering all matters requested by the assurance practitioner in relation to the engagement, within the timeframe required.

Other Factors Affecting Engagement Acceptance

The assurance practitioner shall accept the engagement only when:

1. on the basis of preliminary knowledge of the assurance engagement circumstances, nothing has come to the assurance practitioner’s attention to indicate that:
   1. the requirements of the relevant ethical principles described in ASA 102 will not be satisfied;
   2. the stated basis of preparation chosen by the responsible party, and used in the preparation of the financial information, is likely to be misleading or deceptive;
   3. there will be significant limitations on the scope of the assurance practitioner’s work, including limited access to information or persons;
   4. the responsible party intends to associate the assurance practitioner’s name with the financial information in an inappropriate manner;
   5. the time period covered by the financial information is not acceptable;^[29] or
   6. the assurance engagement does not have a rational purpose;^[30]
2. the preconditions for the engagement, as stated in paragraph 24 of this ASAE are present;
3. the type(s) of assurance requested by the responsible party is/(are) acceptable to the assurance practitioner;
4. the assurance practitioner has the capabilities, competence and necessary qualifications to perform the engagement; and
5. the assurance practitioner believes that the assurance report will be used for its intended purpose. 

If the preconditions for the assurance engagement or other factors affecting engagement acceptance as set out in paragraphs 24 and 25 of this ASAE are not present, the assurance practitioner shall discuss the matter with the responsible 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 applicable law or regulation.

The agreed terms of the assurance engagement shall include, at a minimum: (Ref: Para. A8, A10)

1. the objective(s) and scope of the assurance engagement, including:
   1. the assurance practitioner’s understanding of the purpose of the assurance engagement, the nature of, and time period covered by, the financial information, and the intended users of the assurance report;
   2. confirmation that the assurance practitioner will conduct the engagement in accordance with this ASAE;
   3. a statement that the assurance practitioner is not responsible for the preparation of the financial information;
   4. a statement that the assurance practitioner has no responsibility to perform an assessment of the appropriateness, or otherwise, of the selected stated basis of preparation of the financial information;
   5. a statement that the assurance practitioner will assess whether the financial information has been prepared in accordance with the stated basis of preparation;
   6. in connection with a non‑public document, a statement that the assurance practitioner will disclaim responsibility for any reliance on the assurance report by any party other than intended users, and for any use of the assurance report for any purpose other than that for which the assurance report was prepared;
   7. if applicable, a statement that an audit is not being performed and that consequently, an audit opinion will be not be expressed;
   8. the type(s) and proposed wording of the assurance conclusion; and
   9. a statement that the engagement cannot be relied upon to identify fraud, error(s), illegal act(s) or other irregularities that may exist within the entity;
2. the responsibilities of the assurance practitioner, including:
   1. compliance with relevant ethical requirements, including independence;
   2. performing assurance procedures on the financial information to obtain sufficient appropriate evidence for the type(s) of assurance required;
   3. issuing a written assurance report and any other report agreed with the responsible party;^[31] and
   4. if applicable, and once satisfied it is appropriate to, providing consent in the required form to the responsible party for the inclusion of the assurance practitioner’s name and assurance report in the document;
3. the responsibilities of the responsible party including those set out in paragraphs 24(b) and 24(c) of this ASAE; and
4. such other terms and conditions that the assurance practitioner determines are appropriate in the engagement circumstances. (Ref: Para. A9)

The assurance practitioner shall not agree to a change in the terms of the assurance engagement where there is no reasonable justification for doing so.  If such a change is made, the assurance practitioner shall not disregard evidence that was obtained prior to the change. (Ref: Para. A11)

If the terms of the assurance engagement are to change, the assurance practitioner and the responsible party shall agree on, and record, the new terms of the assurance engagement in an engagement letter or other suitable form of written agreement. (Ref: Para. A12)

If the assurance practitioner is unable to agree to a change in the terms of the engagement, and is not permitted by the responsible party to continue the original engagement, the assurance practitioner shall:

1. withdraw from the engagement, where possible under applicable law or regulation; and
2. determine whether there is any obligation, either contractual or otherwise, to report the circumstances to parties other than the responsible party.

The assurance practitioner shall plan the engagement so that it will be performed effectively.[32] (Ref: Para. A13)

Planning Activities

The assurance practitioner’s planning procedures shall include, at a minimum: (Ref: Para. A14‑A15)

1. establishing an overall engagement strategy that sets the scope, timing and direction of the engagement and that guides the development of the plan;
2. ascertaining the responsible party’s reporting objectives and key milestones of the engagement, to plan the timing of the engagement and the nature of the communications required;
3. considering the factors that in the assurance practitioner’s professional judgement are significant in directing the engagement team’s efforts;
4. considering the results of preliminary engagement activities, including engagement acceptance;
5. if applicable, whether knowledge gained from other engagements performed by the engagement partner for the entity is relevant;
6. considering the nature, timing and extent of planned risk assessment procedures;^[33]
7. assessing assurance engagement risk;^[34] (Ref: Para. A16)
8. determining if the entity’s auditor will need to be contacted in respect of the audit opinion or review conclusion expressed on the latest financial report; and
9. ascertaining the nature, timing and extent of resources necessary to perform the engagement, including considering the involvement of experts.

Determining Materiality when Planning the Engagement (Ref: Para. A17‑A18)

When establishing the overall engagement strategy, the assurance practitioner shall determine materiality for the financial information.^[35]

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 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. A19)

Obtaining an Understanding of the Entity and Its Environment

The procedures to obtain an understanding of the entity and its environment, and to identify and assess risks of material misstatement in the financial information shall include the following: 

1. Enquiries of those persons within the entity who, in the assurance practitioner’s judgement, have information that is likely to assist in identifying and assessing risks of material misstatement.
2. Analytical procedures. (Ref: Para. A20‑A22)
3. Observation and inspection. (Ref: Para. A23‑A25)

Overall Considerations

If the assurance practitioner does not have a prior knowledge of the entity, the assurance practitioner shall obtain an understanding of: (Ref: Para. A26)

1. the type of document that the financial information will be included in;
2. any applicable legal and regulatory requirements related to the financial information being included in that type of document;
3. the nature of the entity, and any acquiree or divestee whose financial information is included in the financial information that is the subject of the assurance report including:
   1. its size, complexity, industry or industries in which it operates, its ownership, financial and regulatory structures, key strategies and products/services, competitors, regulatory environment, management structure, and available financial resources;
   2. its operating history;
   3. if applicable, any changes from prior financial reporting periods in the nature or extent of its operations, including whether there have been any mergers and/or acquisitions; and
   4. its assets and liabilities;
4. relevant industry, legal and regulatory and other external factors pertaining to the entity and any acquiree or divestee; and (Ref: Para. A27‑A29)
5. the stated basis of preparation of the financial information of the entity and of any acquiree or divestee and how these differ, if at all, from the accounting policies contained in the most recent financial report. (Ref: Para. A30)

Notwithstanding any prior knowledge, the assurance practitioner shall obtain an understanding of:

1. the stated basis of preparation chosen by the responsible party for the financial information, if it is different from prior audited or reviewed historical financial information also included in the document, and if so, why;
2. the financial information including:
   1. its type,^[36] source, and nature;^[37]
   2. the time period covered and reasons for its selection;
   3. its intended use;
   4. the extent to which it may be affected by the responsible party’s judgements;
   5. obtaining an understanding of whether it contains comparative financial information, whether such financial information will be restated, and if so, why;
   6. identifying relevant financial information available in the public domain;
   7. identifying expected and plausible relationships within the financial information for use when performing analytical procedures;
   8. whether the entity’s financial report has already been audited or reviewed, and, if so, whether the audit or review was conducted in accordance with Australian Auditing Standards; and what type of audit opinion or review conclusion was expressed in the auditor’s report;
   9. if any part of the financial information has been audited or reviewed;
   10. whether it has been prepared on a consistent basis with that of any prior period audited or reviewed historical financial information included in the document.  For example, the audited or reviewed comparatives may have been restated by the responsible party to ensure consistency of basis of preparation;^[38] and
   11. whether adjustments have been made that were previously considered immaterial in the prior period audit or review of the financial report;
3. the event(s) and transaction(s) that may have a significant impact on the preparation of the financial information;
4. the nature and type of other information to be included in the document, if available, sufficient to enable the assessment of whether it is consistent with the financial information;
5. the requirements of any applicable law or regulation that may impact the financial information;^[39]
6. an understanding of any recent key changes in the entity’s business activities, and how they affect the financial information;
7. an understanding of whether experts are required, or whether reliance will be required to be placed on their work;
8. the expertise of the preparers of the financial information; and
9. internal control over the process used to prepare the financial information.

The understanding required in paragraph 38 of this ASAE shall be: (Ref: Para. A31‑A32)

1. sufficient to enable the assurance practitioner to identify and assess any risks that the financial information may not be prepared in accordance with the stated basis of preparation; and
2. enable the assurance practitioner to plan and design assurance procedures whose nature, timing and extent are responsive to assessed risks of material misstatement and allow the assurance practitioner to obtain the required level of assurance.

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

If the assurance practitioner has performed other engagements for the entity, the assurance practitioner shall consider whether information obtained from other engagements is relevant to identifying and assessing risks of material misstatement. (Ref: Para. A33)

The assurance practitioner shall make enquiries of the responsible party, and others within the entity as appropriate, to determine whether they have knowledge of any actual, suspected or alleged fraud or non‑compliance with laws and regulations affecting the financial information.

The engagement partner and other key members of the engagement team, and any key assurance practitioner’s external experts, shall discuss the susceptibility of the entity’s financial information to material misstatement whether due to fraud or error, and the application of the stated basis of preparation to the entity’s facts and circumstances.  The engagement partner 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.

Reliance on the work performed by others

The assurance practitioner shall consider whether to use the work of any expert,^[40] including the responsible party’s expert^[41] or other assurance practitioner, in respect of obtaining sufficient appropriate evidence in respect of a material area or item within the financial information, including:

1. evaluating whether any material adjustments made to, or assumptions included within, the financial information are in accordance with the stated basis of preparation;
2. evaluating the suitability of the stated basis of preparation; and/or
3. assessing the impact of any contractual requirements on the financial information.

In considering whether to use the work of an expert, the assurance practitioner shall take into account:

1. the purpose for which the expert’s work is to be, or, was, performed;
2. the risks of material misstatement in the material area or item within the financial information to which the expert’s work relates;
3. the significance of the expert’s work to the engagement;
4. the assurance practitioner’s assessment of the competence, capabilities and objectivity of the expert for the assurance practitioner’s purposes;
5. whether the assurance practitioner will be able to obtain access to the relevant working papers supporting the expert’s report; and
6. any prior knowledge of the expert’s work.

If the assurance practitioner does intend to use the work of an expert, and consequently place reliance on the expert’s work, for the purposes of the engagement, the assurance practitioner shall consider if a written acknowledgement by the expert or other assurance practitioner is required in order for the assurance practitioner to place such reliance, and if so, shall request such an acknowledgement.

If the expert does not provide a required written acknowledgement, the assurance practitioner shall consider what additional procedures, if any, are necessary, in order for the assurance practitioner to place reliance on the expert’s work and conclude on the material area or item. (Ref: Para. A34(a))

If the expert does permit reliance to be placed on the work performed, the assurance practitioner shall evaluate the adequacy of the expert’s work for the assurance practitioner’s purposes by requesting access to the expert’s working papers in order to:

1. evaluate the competence, capabilities, objectivity and independence of that expert;
2. understand the scope, timing and type of work performed and outcomes;
3. evaluate the appropriateness of the work performed as evidence for the purpose of the engagement;
4. if applicable, understand the materiality levels set by the expert;
5. if applicable, evaluate the expert’s work methodology; 
6. if applicable, evaluate any audit or review differences identified by that expert;
7. understand the type of audit opinion, review conclusion or report issued by that expert, and if applicable, the reasons for any modification;
8. if applicable, ascertain whether the financial information has been prepared in accordance with the stated basis of preparation of the entity;
9. determine, based on the results of the expert’s work, whether additional assurance procedures will be required to be performed on the financial information in order to obtain sufficient appropriate evidence on which to base the required assurance conclusion; and
10. if applicable, evaluate whether the other assurance practitioner’s audit opinion or review conclusion was modified, and determine the implications for the engagement, including considering:
    1. the assurance practitioner’s ability to undertake the engagement in accordance with the agreed terms; and
    2. the potential impact, if any, on the assurance procedures to be performed.

Causes of Risks of Material Misstatement

When designing the procedures to obtain an understanding of the entity and its environment, and to identify and assess risks of material misstatement in the financial information, required in paragraph 36 of this ASAE, the assurance practitioner shall consider the following factors:

1. the likelihood of intentional misstatement in the financial information;
2. applicable law or regulatory requirements with respect to the preparation or presentation of the financial information;
3. the complexity and degree of subjectivity underlying calculations of information which are included in the financial information; and
4. how the responsible party makes all significant accounting estimates included in the financial information. (Ref: Para A35)

Assurance Procedures

The assurance practitioner shall design and implement procedures to respond to, and address the assessed risks of material misstatement of the financial information. (Ref: Para. A36‑A37)

The assurance practitioner shall use professional judgement to design and perform assurance procedures whose nature, timing and extent are responsive to the assessed risks of material misstatement, after:

1. considering the likelihood of material misstatement in the financial information due to the particular characteristics of the financial information (that is, the inherent risk); (Ref: Para. A38‑A39)
2. assessing the need to obtain more persuasive evidence the higher the assurance practitioner’s assessment of risk, such as external confirmation procedures; and/or (Ref: Para. A40‑A41)
3. if applicable, in a reasonable assurance engagement, and irrespective of the assessed risks of material misstatement, designing and performing tests of details or analytical procedures for each material account balance within the financial information.

In designing analytical procedures, the assurance practitioner shall determine the suitability of particular analytical procedures in relation to the financial information, taking into consideration the assessed risks of material misstatement of the financial information.

The assurance procedures shall include:

• if applicable, in respect of comparative information:
  • comparing, for consistency, its stated basis of preparation against the entity’s previously audited or reviewed historical financial information and if applicable, the most unaudited or unreviewed recent annual or interim financial report, and
    • evaluating the reasons for any differences; and
    • ensuring any restatements or adjustments made are appropriate;
  • reading the most recent audited or reviewed financial report in order to identify any matters that may affect the financial information;
• evaluating the reasonableness and appropriateness of the time period covered;
• enquiring of the responsible party in respect of the financial information:
  • that it agrees to, and has been reconciled to underlying, supporting accounting records and documentation;
  • that it reflects any changes made to the stated basis of preparation from the most recent audited or reviewed financial statements;
  • that it reflects the results of any identified misstatements from the prior year’s financial statements;
  • if any part of the financial information has been previously audited or reviewed, that it agrees to those audited or reviewed records; and/or
• if applicable, performing external confirmation procedures in respect of material balances within the financial information;
• assessing the appropriateness and suitability of any adjustments made by the responsible party as compared to the stated basis of preparation; performing the analytical procedures referred to in paragraph 51 of this ASAE on the financial information that the assurance practitioner considers are responsive to the assessed risks of material misstatement in the financial information: (Ref: Para. A42)
  • evaluating the reliability of data from which the assurance practitioner’s expectation of recorded amounts or ratios is developed, taking account of the source, comparability, and nature and relevance of information available;
  • developing an expectation with respect to recorded amounts or ratios in the financial information; and
  • if applicable, in a reasonable assurance engagement, the expectation developed in (ii) above must be sufficiently precise to identify possible material misstatements in the financial information; and/or
• if applicable, in a reasonable assurance engagement, performing tests of details of material classes of transactions or account balances within the financial information;
• if applicable, in respect of material accounting estimates included in the financial information: (Ref: Para. A43)
  • confirming that the responsible party has appropriately applied the requirements of the stated basis of preparation relevant to material accounting estimates;
  • verifying the methodology chosen for making material accounting estimates:
    • has been applied consistently;
    • is appropriate when compared with the most recent audited/reviewed financial statements;
    • reflects any changes in methodology from prior periods; and
    • any changes in methodology are consistent with the stated basis of preparation;
  • considering whether other procedures are necessary in the circumstances including testing how the responsible party made the accounting estimate and the data on which it is based, including evaluating whether the method of quantification used is appropriate in the circumstances, and the assumptions used by the responsible party are reasonable;
• in respect of the stated basis of preparation:
  • understanding the process for its selection and approval;
  • understanding what accounting policies have been adopted;
  • assessing its reasonableness and suitability for presenting the significant effects attributable to the event(s) or transaction(s) that is the subject of the document by understanding the nature, effect of, and reasons for any changes made to the stated basis of preparation as compared to that used in the most recent audited or reviewed financial statements;
  • performing consistency checks in the application of the stated basis of preparation to the financial information;
  • assessing, based on the assurance practitioner’s understanding, whether the stated basis of preparation is adequately described in the document; and
• assessing whether the financial information is prepared in accordance with the stated basis of preparation;
• enquiring of the responsible party and/or other parties^[42] relating to whether there were:
  • any changes in accounting policies, financial reporting practices and other reporting requirements that occurred during the time period under examination;
  • any corrections made to convert the financial information from an overseas jurisdiction’s generally accepted accounting principles to the stated basis of preparation;
  • any unadjusted audit differences from the most recently audited or reviewed financial report that may be material for the purposes of the document;
  • any other provisions and other accounting estimates (such as asset revaluations) in the financial information; and
  • any significant transactions with related parties (for example, assets purchased from an associated entity); and
• considering the use of sampling. (Ref: Para. A44)

If the analytical procedures described in paragraph 52(e) of this ASAE identify fluctuations or relationships that are inconsistent with other relevant information, or differ significantly from expected amounts or ratios in the financial information, the assurance practitioner shall investigate such differences by:

1. enquiring of the responsible party;
2. evaluating the responses received; and/or
3. if applicable:
   1. determining whether other procedures are necessary in the circumstances; and (Ref: Para. A45)
   2. obtaining additional evidence supporting the responsible party’s responses to the enquiries made.

Oral Representations

If the assurance practitioner obtains oral representations from the responsible party in respect of matters supporting the financial information, the assurance practitioner shall:

1. evaluate their reasonableness and consistency with other evidence obtained, including other representations;
2. consider whether those making the representations can be expected to be well informed on the particular matters;
3. obtain appropriate corroborative evidence;^[43] and
4. document the key aspects of the oral representation.

Additional Procedures

The assurance practitioner shall remain alert throughout the engagement for any event(s), condition(s), transaction(s), or error(s) that may:

1. cast doubt over the reliability, accuracy, or completeness of the information used by the assurance practitioner as evidence for the financial information; and/or
2. require a reassessment, or revision, of the assurance practitioner’s risk assessment; and/or
3. require changes, or additions, to the planned assurance procedures in order to obtain sufficient appropriate evidence on which to base the assurance conclusion on the financial information. (Ref: Para. A46)

If the assurance practitioner becomes aware of an event(s), condition(s), transaction(s) or error(s) that causes the assurance practitioner to believe the financial information may be materially misstated, the assurance practitioner shall use professional judgement to design and perform additional procedures sufficient to enable the assurance practitioner to: (Ref: Para. A46)

1. conclude that the event(s), condition(s), transaction(s) or error(s) is (are) not likely to cause the financial information to be materially misstated; or
2. determine that the event(s), condition(s), transaction(s) or error(s) cause(s) the financial information to be materially misstated.

Communication and Correction of Misstatements

Prior to evaluating the effect of any identified uncorrected misstatements the assurance practitioner shall reassess materiality determined in accordance with paragraphs 33 and 34 of this ASAE to confirm whether it remains appropriate in the context of the financial information.

The assurance practitioner shall determine whether the uncorrected misstatements are material, individually or in aggregate to the financial information, taking into consideration the size and nature of the misstatements, and the particular circumstances of their occurrence. 

If the assurance practitioner believes that it is necessary to correct an identified misstatement for the financial information to be prepared in accordance with the stated basis of preparation, the assurance practitioner shall communicate this as soon as practicable to the responsible party to enable them to make the correction. 

If, at the assurance practitioner’s request, the responsible party has corrected an identified misstatement(s), the assurance practitioner shall perform additional procedures on the corrected misstatements to ensure they have been appropriately made and determine whether any material misstatements remain in the financial information.

If the responsible party refuses to correct some or all of the identified material misstatements in the financial information communicated by the assurance practitioner, the assurance practitioner:

1. shall obtain an understanding of the responsible party’s reasons for not making the adjustments, and take this into account when forming the assurance practitioner’s conclusion; and 
2. if the misstatement is material, the assurance practitioner shall express an adverse conclusion in accordance with paragraph 84(b) of this ASAE.

Identified Misstatements

The assurance practitioner shall accumulate misstatements identified during the engagement, other than those that are clearly trivial. (Ref: Para. A47‑A48)

The assurance practitioner shall determine whether the overall engagement strategy and engagement plan needs 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 already identified, could be material; or
2. the aggregate of identified misstatements approaches materiality levels set in accordance with paragraphs 33 and 34 of this ASAE.

The assurance practitioner considers the adequacy, relevance and reliability of the information obtained as evidence and shall evaluate whether the assurance practitioner has obtained sufficient appropriate evidence^[44] on which to express an assurance conclusion on the financial information. (Ref: Para. A49)

When the document containing the financial information includes, or will include, other information, the assurance practitioner shall request from the responsible party a copy of that document and read its entire contents for the sole purpose of identifying any material inconsistencies with, or material misstatements of fact in relation to, the financial information. (Ref: Para. A50‑A51)

If the assurance practitioner:

1. identifies a material inconsistency between the other information and the financial information; and/or
2. becomes aware of a material misstatement of fact in that other information that is related to the financial information; and/or
3. identifies a potentially misleading or deceptive statement in relation to the financial information;

the assurance practitioner shall discuss this with the responsible party and:

4. if the responsible party agrees to a revision of the document the assurance practitioner shall request an updated copy of the document to ensure the revision has been made; or
5. if the responsible party refuses to make the revision, the assurance practitioner shall consider whether to:
   1. obtain expert advice on the appropriate course of action for the assurance practitioner; and/or
   2. include in the assurance report an Other Matter paragraph^[45] that describes the material inconsistency and/or misstatement of fact; and/or
   3. withdraw consent for the responsible party to include the assurance report in the document; and/or
   4. withdraw from the engagement, where withdrawal is possible under applicable law or regulation.

The assurance practitioner shall determine if an assessment of the entity’s ability to continue as a going concern is relevant to the engagement.^[46] (Ref: Para. A52)

If the assurance practitioner determines that an assessment of the entity’s ability to continue as a going concern is relevant, the assurance practitioner shall perform such an assessment in order to obtain sufficient appropriate evidence regarding the appropriateness of the responsible party’s use of the going concern assumption in the preparation of the financial information. (Ref: Para. A53)

If the assurance practitioner concludes the entity is not a going concern, or if there is a material uncertainty related to event(s) or condition(s) that individually, or collectively, may cast significant doubt on the entity’s ability to continue as a going concern, the assurance practitioner shall consider the implications for the engagement and the assurance report. (Ref: Para. A54)

(Ref: Para. A55)

The assurance practitioner shall consider the impact of any event(s), transaction(s), correction(s), or error(s) of which the assurance practitioner becomes aware, that may materially affect the financial information, for the time period up to and including the date of the assurance report.^[47] 

The assurance practitioner shall discuss with the responsible party any such event(s), transaction(s), correction(s), or error(s) identified during the engagement in order to establish whether the effect on the financial information is material.  If the effect is material, the assurance practitioner must perform additional procedures to confirm if the event(s), transaction(s), correction(s), or error(s) has (have) been corrected in the financial information and/or elsewhere in the document, if applicable.  If the required correction(s) is(are) not made, the assurance practitioner shall consider what further action is appropriate in the engagement circumstances, including the implications for the assurance report.

The assurance practitioner shall revoke any consent to include the assurance report in the document that may have been previously provided, if the event(s), transaction(s), correction(s), or error(s) referred to in paragraph 70 of this ASAE is (are) not, in the assurance practitioner’s professional judgement, appropriately addressed by the responsible party.

(Ref: Para. A56-A57)

If the assurance practitioner becomes aware of event(s), transaction(s) or error(s) after the date of the issuance of the assurance report and before the relevant date that may have caused the assurance practitioner to amend the assurance report, had the assurance practitioner known of such matters at the date of that assurance report, the assurance practitioner shall:

1. discuss such event(s), correction(s), transaction(s) or error(s) with the responsible party; and
2. consider what further action is appropriate in the engagement circumstances, including the implications for the assurance report.

The assurance practitioner shall revoke any consent to include the assurance report in the document that may have been previously provided, if the event(s), transaction(s), correction(s), or error(s) referred to in paragraph 73 of this ASAE are not, in the assurance practitioner’s professional judgement, appropriately addressed by the responsible party. 

The assurance practitioner shall request the responsible party to provide written representations at the completion of the engagement containing the following: (Ref: Para. A58‑A61)

1. the preconditions described in paragraphs 24(b) and 24(c) of this ASAE;
2. confirmation of the intended use of the financial information;
3. confirmation that the going concern basis of preparation of the financial information is appropriate in the document;
4. confirmation that there are no currently anticipated material changes to be made to the financial information between the date of the assurance report and the relevant date;
5. confirmation that there has been no event(s), transactions, correction(s), error(s) or other matter(s) that has(have) arisen or been discovered subsequent to the preparation of the financial information that may impact, or require adjustment to, the financial information;
6. confirmation that the assurance practitioner has been provided with a listing of all known uncorrected immaterial misstatements in the financial information, together with an acknowledgement that the responsible party is responsible for confirming that such misstatements are immaterial;
7. and such other written representations that the assurance practitioner determines are appropriate in the engagement circumstances.

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

If the assurance practitioner has sufficient doubt about the competence, integrity, ethical values, or diligence of those providing the written representations, or if the representations received are inconsistent with other evidence, the assurance practitioner shall:

1. if practical, discuss the matter(s) with the responsible party;
2. perform other procedures to attempt to resolve any inconsistencies;
3. re‑evaluate the integrity of the responsible party and evaluate the effect this may have on the reliability of representations (oral or written) and evidence in general; and
4. take appropriate action, including determining the possible effect on the assurance conclusion in the assurance report. 

If the representations remain inconsistent with other evidence, the assurance practitioner shall reconsider the assessment of the competence, integrity, ethical values, or diligence of the responsible party or of its commitment to an enforcement of these, and shall determine the effect that this may have on the reliability of representations (oral or written) and evidence in general.

If the responsible party does not provide such written representations, or refuses to provide them, the assurance practitioner shall qualify or disclaim the conclusion in the assurance report, based on a limitation on the scope of the engagement. 

The assurance practitioner shall conclude as to whether the assurance practitioner has obtained the required level of assurance on the financial information, or elements of the financial information.  That conclusion shall take into consideration the requirement in paragraph 64 of this ASAE.

In forming the conclusion the assurance practitioner shall consider:

1. the assurance practitioner’s conclusion regarding the sufficiency and appropriateness of evidence obtained; and
2. an evaluation of whether any uncorrected misstatements are material, either individually or in aggregate, to the financial information.

Unmodified Conclusion

The assurance practitioner shall express an unmodified conclusion in the assurance report when the assurance practitioner, having obtained sufficient appropriate evidence, concludes that the financial information, or elements of the financial information, do not require material modification.

Emphasis of Matter Paragraph

The assurance practitioner shall include an Emphasis of Matter paragraph in the assurance report when the assurance practitioner concludes it is necessary to draw users’ attention to a matter disclosed in the financial information or accompanying explanatory notes on the basis that the matter is of such importance that it is fundamental to users’ understanding of the financial information.^[48] (Ref: Para. A62)

Modified Conclusion

The assurance practitioner shall, subject to paragraph 85 of this ASAE, express a modified conclusion^[49] in the assurance report if:

1. having obtained sufficient appropriate evidence, the assurance practitioner concludes that the effects, or possible effects, of a matter are material but not pervasive as to require an adverse conclusion or a disclaimer of conclusion, (qualified conclusion);
2. having obtained sufficient appropriate evidence, the assurance practitioner concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial information (adverse conclusion); (Ref: Para. 61(b))
3. the assurance practitioner is unable to obtain sufficient appropriate evidence on which to base an assurance conclusion, and concludes that the possible effects on the financial information of undetected misstatements, if any, could be both material and pervasive (disclaimer of conclusion); or (Ref: Para. A63, A79)
4. the responsible party has not made the required disclosures, relating to material uncertainties in respect of going concern^[50], in the document (a qualified or adverse conclusion, as appropriate).

The assurance practitioner shall discuss with the responsible party any conclusion that is intended to be modified prior to preparing the assurance report.  If the responsible party does not agree to make the necessary changes to appropriately resolve the matter, the assurance practitioner shall include the modified conclusion in the assurance report and consider any other implications for the engagement. (Ref: Para. A64)

The assurance practitioner shall provide a written assurance report to the responsible party containing a clear expression of the assurance practitioner’s conclusion on each type of financial information that is the subject of the engagement. (Ref: Para. A65, A67)

The assurance practitioner’s conclusion shall clearly distinguish and separate each type of financial information from any other types of financial information within the assurance report. (Ref: Para. A66)

If the assurance practitioner is required by law or regulation to use a specific layout or wording in the assurance report, the assurance practitioner shall evaluate whether the assurance report is acceptable in the circumstances of the engagement, and if not, whether additional explanation in the assurance practitioner’s report can mitigate possible misunderstanding. (Ref: Para. A67)

(Ref: Para. A69)

The assurance practitioner shall consider applicable law or regulation when the assurance practitioner has been requested to provide consent in writing to the responsible party for the inclusion of the assurance report in the document. 

Where the assurance practitioner considers it inappropriate for the assurance report to be included in the document, consent shall either not be provided, or be revoked prior to the relevant date of the document’s release. 

The assurance practitioner shall prepare documentation on a timely basis that is sufficient to enable an experienced assurance practitioner, having no previous connection with the engagement, to understand: (Ref: Para. A70‑A71)

1. the nature, timing and extent of the assurance procedures performed to comply with this ASAE and applicable legal and regulatory requirements;
2. the results of the procedures performed, and the evidence obtained; and
3. significant matters arising during the engagement, the conclusions reached thereon, and significant professional judgements made in reaching those conclusions.

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 within the assurance practitioner’s firm that support these conclusions;
3. conclusions reached regarding the acceptance and continuance of client relationships and engagements;
4. evidence of compliance with applicable systems of quality management requirements within the firm;^[51] and
5. the nature and scope of, and conclusions resulting from, consultations undertaken during the course of the engagement.

This section deals with the additional special consideration in the application of requirements in paragraphs 16 to 92 inclusive of this ASAE when the assurance practitioner is requested to provide assurance on historical financial information prepared by the responsible party in connection with a corporate fundraising.  Paragraphs 96 to 104 inclusive of this ASAE deal with additional special considerations when the historical financial information includes pro forma adjustments, resulting in pro forma historical financial information.

The assurance practitioner shall not report compliance with this ASAE in the assurance report unless it includes, at a minimum, each of the elements identified in paragraph 95 of this ASAE.

Basic Elements of the Assurance Report

The assurance report shall include, at a minimum, the following elements:

1. a title that clearly indicates the report is an independent limited or reasonable assurance report;
2. an addressee;
3. a background section that identifies the purpose of the assurance report, and if applicable, the fact that it will be included in the document;
4. a scope section that:
   1. identifies the entity (entities) whose historical financial information is the subject of the assurance report, and if applicable, the responsible party of the entity;
   2. identifies the financial information being reported on, the time period covered; and if applicable;
   3. cross reference to, or describes, the source of the financial information and the stated basis of preparation selected by the responsible party in the preparation of the historical financial information; and
   4. whether the historical financial information has been previously audited or reviewed and by whom, and the type of conclusion expressed;
5. a description of the responsible party’s responsibilities, including those set out in paragraph 27(c) of this ASAE;
6. a description of the assurance practitioner’s responsibilities, including:
   1. a statement that the engagement was performed in accordance with this ASAE;
   2. if applicable, a summary of the assurance practitioner’s procedures.  In the case of a limited assurance engagement, this shall include a statement that the procedures performed in a limited assurance engagement vary in nature from, and are less in extent than for, a reasonable assurance engagement.  As a result, 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; (Ref: Para. A72‑A74)
   3. if applicable, a statement that the engagement did not include updating or re‑issuing any previous audit or review report on financial information used as a source of the historical financial information;
7. the assurance practitioner’s conclusion on the historical financial information:
   1. in a limited assurance engagement:
      • if the conclusion is unmodified, that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that the historical financial information [as described in section [X] of the document] is not presented fairly, in all material respects, in accordance with the stated basis of preparation [as described in section [X] of the document or the scope section of this report]; or
      • if the conclusion is modified, a clear description of the reasons for the modification in a Basis for Modification qualification paragraph, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; and/or
      • where the assurance practitioner has identified material event(s), transaction(s), correction(s), or error(s) outside the entity's ordinary business that in the assurance practitioner’s professional judgement require comment, or adjustment to, the historical financial information, but are not adequately addressed in the historical financial information, and/or the document, the assurance practitioner shall include a section covering such material event(s) or transaction(s) and if applicable, their potential impact to the extent it can be reasonably estimated; or
   2. in a reasonable assurance engagement:
      • if the conclusion is unmodified, that the historical financial information is presented fairly, in all material respects, in accordance with the stated basis of preparation, [as described in section [X] of the document or the scope section of this report]; or
      • if the conclusion is modified, a clear description of the reasons for the modification in a Basis for Modification qualification paragraph, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; and/or
      • where the assurance practitioner has identified material event(s), transaction(s), correction(s), or error(s) outside the entity's ordinary business that in the assurance practitioner’s professional judgement require comment, or adjustment to, the historical financial information, but are not adequately addressed in the historical financial information, and/or the document, the assurance practitioner shall include a section covering such material event(s) or transaction(s) and if applicable, their potential impact to the extent it can be reasonably estimated; and
8. if applicable, an Emphasis of Matter paragraph^[52] when the assurance practitioner concludes it is necessary to draw users’ attention to a matter disclosed in the historical financial information or accompanying explanatory notes on the basis that the matter is of such importance that it is fundamental to users’ understanding of the historical financial information;
9. a statement that the historical financial information has been prepared for inclusion in the document, and that as a result, the historical financial information may not be suitable for use for another purpose;
10. a declaration of interest, or disclosure of interest, statement;
11. if applicable, a consent statement;
12. if applicable, a liability statement;
13. the assurance practitioner’s signature;
14. the date of the assurance practitioner’s report that shall be the date the assurance practitioner signs the report; and
15. the assurance practitioner’s address.

This section deals with additional special considerations in the application of requirements in paragraphs 16 to 92 inclusive of this ASAE, when the assurance practitioner is required to provide assurance on pro forma financial information that is historical.  When the assurance practitioner is requested to provide assurance on whether the pro forma financial information has been properly compiled, refer to ASAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Historical Financial Information Included in a Prospectus or other Document. (Ref: Para. A75‑A76)

Preconditions for Acceptance

In addition to the requirements in paragraph 24 of this ASAE, the assurance practitioner shall, prior to agreeing the terms of the engagement, obtain agreement from the responsible party that it accepts its responsibility for:

1. selecting the basis of preparation of the pro forma historical financial information;
2. selecting the unadjusted historical financial information used as the source for the pro forma historical financial information;
3. selecting and determining the pro forma adjustments;
4. complying with the requirements of all applicable laws and regulation;^[53] and
5. preparing pro forma historical financial information in accordance with the stated basis of preparation.

Other Factors Affecting Engagement Acceptance

In addition to the requirements in paragraph 25 of this ASAE, the assurance practitioner shall only accept the engagement if the level of assurance to be provided on the pro forma historical financial information is not higher than the level of assurance expressed on the source of the unadjusted historical financial information, if it has been previously audited or reviewed. (Ref: Para. A77)

Obtaining an Understanding of the Entity and Its Environment

In addition to the requirements in paragraphs 37 and 38 of this ASAE, the assurance practitioner shall obtain:

1. an understanding of the source of the unadjusted historical financial information used in the preparation of the pro forma historical financial information including:
   1. whether it has been previously audited or reviewed, and
   2. if so, if the audit opinion/review conclusion was modified, considering the implications, if any, for the pro forma historical financial information including: (Ref: Para. A78‑A79)
      • what appropriate action to take; and
      • whether there is any effect on the assurance practitioner’s ability to report in accordance with the terms of the engagement, including any effect on the assurance report; or
   3. planning the additional procedures required if the source of the unadjusted historical financial information has not been previously audited or reviewed; and
2. in respect of the pro forma adjustments:
   1. identifying all the pro forma adjustments;
   2. understanding the event(s) or transaction(s) that the pro forma adjustments are intending to record; and
   3. understanding the methodology used by the responsible party in formulating the pro forma adjustments, including the basis for, and calculations underlying, them.^[54]

Assurance Procedures

In addition to the requirements in paragraph 52 of this ASAE, the assurance procedures performed on the pro forma historical financial information shall include:  

1. if the source of the unadjusted historical financial information has not been previously audited or reviewed, such procedures as are necessary, in the assurance practitioner’s professional judgement, to obtain sufficient appropriate evidence in relation to that financial information on which to rely for engagement purposes; (Ref: Para. A80)
2. if the source of the unadjusted historical financial information has been previously audited or reviewed, such procedures as are necessary, in the assurance practitioner’s professional judgement, to obtain sufficient appropriate evidence on which to rely for engagement purposes; (Ref: Para. A81)
3. understanding the stated basis of preparation for the pro forma historical financial information;
4. understanding the basis for, and calculations underlying, the pro forma adjustments;
5. determining whether the pro forma adjustments: (Ref: Para. A82‑A83)
   1. have been selected and applied to the unadjusted historical financial information by the responsible party in accordance with the stated basis of preparation;
   2. are supported by sufficient appropriate evidence, and are arithmetically correct;^[55] and
6. determining whether the resultant pro forma historical financial information reflects the results of applying the pro forma adjustments to the unadjusted financial information.

If the assurance practitioner is not satisfied that the pro forma adjustments:

1. have been made in accordance with the stated basis of preparation; and/or
2. lack sufficient appropriate evidence;

the assurance practitioner shall discuss this with the responsible party, and:

3. if the responsible party agrees to make a revision of the pro forma adjustments, the assurance practitioner shall request an updated copy of the document in order to ensure the revision has been made; or
4. if the responsible party refuses to make a required revision to the pro forma adjustments, the assurance practitioner shall consider whether to:
   1. obtain expert advice on the appropriate course of action of the assurance practitioner;
   2. withdraw consent for the responsible party to include the assurance report in the document; and/or
   3. withdraw from the engagement, where withdrawal is possible under applicable law or regulation.

In addition to the requirements in paragraph 75 of this ASAE, the assurance practitioner shall request the responsible party to include in the written representations an acknowledgement of their responsibility for the matters described in paragraph 97 of this ASAE.

The assurance practitioner shall not report compliance with this ASAE in the assurance report unless it includes, at a minimum, each of the elements identified in paragraph 104 of this ASAE.

Basic Elements of the Assurance Report

In addition to the requirements in paragraph 95 of this ASAE, the assurance report shall include, at a minimum, the following elements:

1. statements in the scope section that:
   1. identify the pro forma historical financial information being reported on, including the time period it covers;
   2. identify whether there has been an audit or review conducted on the source from which the unadjusted historical financial information was prepared; and
   3. cross reference to, or describe, the stated basis of preparation selected by the responsible party for the pro forma historical financial information; (Ref: Para. A84)
2. if applicable, a statement that the firm of which the assurance practitioner is a member holds all applicable license(s) and/or other designation(s) required under the Corporations Act 2001;
3. if applicable, a statement that the engagement did not include updating or re‑issuing any previous audit or review report on the unadjusted historical financial information used in the preparation of the pro forma historical financial information;
4. the assurance practitioner’s conclusion on the pro forma historical financial information:
   1. in a limited assurance engagement:
      • with an unmodified conclusion, a statement that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that the pro forma historical financial information is not presented fairly, in all material respects, in accordance with the stated basis of preparation being [insert details/cross reference]; or
      • with a modified conclusion, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; or
   2. in a reasonable assurance engagement:
      • with an unmodified conclusion, a statement that the assurance practitioner believes that the pro forma historical financial information is presented fairly, in all material respects, in accordance with the stated basis of preparation being [insert details/cross reference]; or
      • with a modified conclusion, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; and
5. if applicable, a reference to the assurance practitioner’s financial services guide.

This section deals with additional special considerations in the application of requirements in paragraphs 16 to 92 inclusive of this ASAE, when the assurance practitioner is requested to provide assurance on prospective financial information prepared by the responsible party based on their assumptions (excluding material hypothetical assumptions).  Paragraphs 119 to 127 inclusive of this ASAE deal with the additional special considerations when the prospective financial information includes only hypothetical assumptions, or a mixture of assumptions and material hypothetical assumptions, resulting in a projection that is for inclusion in a non-public document.  Paragraphs 128 to 136 inclusive of this ASAE deal with the additional special considerations when the prospective financial information includes pro forma adjustments, resulting in a pro forma forecast.  

Preconditions for Acceptance

In addition to the requirements in paragraph 24 of this ASAE, the assurance practitioner shall, prior to agreeing the terms of the engagement, obtain agreement from the responsible party that they:

1. understand and accept the type of assurance to be expressed on each of the three different elements of the prospective financial information; and (Ref: Para. A85‑A86)
2. acknowledge and understand their responsibility for the preparation of the prospective financial information:
   1. in accordance with the stated basis of preparation; and
   2. based on assumptions selected by the responsible party that:^[56]
      • provide reasonable grounds^[57] for the preparation of the prospective financial information, if it is to be included in a public document; or
      • are clearly realistic for the preparation of the prospective financial information, if it is to be included in a non‑public document;
      • are not misleading or deceptive, having regard to applicable law and regulation.^[58]

Other Factors Affecting Engagement Acceptance

In addition to the requirements in paragraph 25 of this ASAE, the assurance practitioner shall accept the engagement only when:

1. on the basis of preliminary knowledge of the assurance engagement circumstances, nothing has come to the assurance practitioner’s attention to indicate that:
   1. if the prospective financial information is to be included in a public document, it has been prepared based on:
      • assumptions that do not have reasonable grounds; (Ref: Para. A87) and/or
      • material hypothetical assumptions; or
   2. if the prospective financial information is to be included in a non‑public document, it has been prepared based on assumptions that are clearly unrealistic;
   3. any historical financial information used as a source for the prospective financial information and that is material to such prospective financial information:
      • has not been previously audited or reviewed, and
      • is not planned to be reviewed as part of the engagement; (Ref: Para. A88)
2. the prospective financial information will be inappropriate for its intended use;
3. the preconditions for the engagement, as stated in paragraph 106 of this ASAE, are present; and (Ref: Para. A89)
4. the type(s) of assurance required on different elements of the prospective financial information by the responsible party is acceptable to the assurance practitioner.

Obtaining an Understanding of the Entity and its Environment

In addition to the requirements in paragraphs 37 and 38 of this ASAE, the assurance practitioner shall, at the minimum, obtain an understanding of:  

1. whether the prospective financial information is a forecast, a projection, or a pro forma forecast;
2. the stated basis of preparation chosen by the responsible party including:
   1. its relevance, completeness, reliability, and understandability; and
   2. any differences between the basis and that used in the most recent audited or reviewed historical financial information;
3. the accuracy of any forecast(s) prepared in prior time periods, and the reasons for any material variances;
4. whether comparative information is to be included in the document, and whether it will be restated;
5. relevant financial information available in the public domain; and
6. key expectations and relationships in the prospective financial information for use when designing and performing analytical procedures.

Assurance Procedures

Source of the Prospective Financial Information

In addition to the requirements in paragraph 52 of this ASAE, the assurance practitioner’s procedures to determine whether the responsible party has extracted the source of the prospective financial information from an appropriate source shall include:

1. making relevant enquiries of the responsible party, other experts and relevant parties on the nature of the source of the prospective financial information;
2. if the source of the prospective financial information includes material historical financial information which has been previously audited or reviewed:
   1. reading the historical financial information to which the audit or review report relates to establish if its stated basis of preparation and time frame covered are acceptable; and
   2. requesting, and obtaining, a copy of the audit or review report accompanying the historical financial information and, if obtained, reading it to assess whether:
      • the audit or review report was modified, and if so, why, and the impact, if any, on the engagement; and
      • there are any matters that may affect the prospective financial information; and/or
   3. if applicable, in a reasonable assurance engagement:
      • contacting the other assurance practitioner to obtain access to the audit working papers supporting the audit or review on the historical financial information and evaluating the extent of evidence, if any, provided by the results of that prior audit or review;
      • designing and performing further procedures on the historical financial information in order to obtain further evidence of the adequacy, relevance and reliability of the historical financial information to be used as evidence, including:
        • agreeing or reconciling some or all the historical financial information with supporting records;
        • re‑performing audit tests of material account balances;
        • evaluating the adequacy and reliability of the historical financial information as a source of the prospective financial information; and
      • comparing the source with the corresponding prior period financial information and, as applicable, the immediately preceding annual or interim historical financial information, and discussing any significant changes with the responsible party;
3. if the source of the prospective financial information includes material historical financial information which has not been previously audited or reviewed, or is a forecast, the assurance practitioner shall perform assurance procedures to be satisfied that the source is appropriate, including: (Ref: Para. A90)
   1. ascertaining whether the assurance practitioner is able to access all required documentation describing and supporting the source;
   2. enquiring of the responsible party about:
      • the process by which the source has been prepared and the reliability of its underlying accounting records;
      • whether all transactions for the time period have been recorded;
      • identifying the stated basis of preparation of the source;
      • whether the source has been prepared in accordance with the entity’s accounting policies and stated basis of preparation;
      • whether there have been any changes in accounting policies from that adopted in the most recent audited or reviewed financial statements and, if so, how such changes have been dealt with;
      • their assessment of the risk that the source may be materially misstated as a result of error or fraud;
      • how recently the entity’s historical financial information was audited or reviewed;
      • whether there has been any changes in the entity’s business activities and operations, and if so, their effect on the source; and
      • the extent to which statistical and mathematical modelling, computer‑assisted techniques and other techniques have been used in the preparation of the prospective financial information, and the reliability of those techniques; and
   3. if the assurance practitioner has audited or reviewed the immediately preceding annual or interim historical financial information, considering the findings and whether these might indicate any issues with the preparation of the source from which the historical financial information has been extracted; and/or
   4. if applicable, in a reasonable assurance engagement:
      • corroborating the information provided by the responsible party in response to the assurance practitioner’s enquiries when the responses appear inconsistent with the assurance practitioner’s understanding of the entity, the prospective financial information, or engagement circumstances:
      • agreeing or reconciling some or all the financial information with supporting records;
      • performing selected audit tests of material account balances within the financial information; and
      • comparing the source with the corresponding prior period financial information and, as applicable, the immediately preceding annual or interim financial information, and discussing significant changes with the responsible party;
4. evaluating the adequacy and reliability of the financial information as a source of the prospective financial information;
5. evaluating the accuracy of any prospective financial information prepared in prior time periods as compared to actual financial results, and the reasons provided for significant variances; and
6. ensuring the source of the prospective financial information reflects any changes made to the stated basis of preparation from the prior audited or reviewed period, and if so:
   1. determining the nature of, and reasons for, the changes and their effect on the prospective financial information;
   2. evaluating whether there have been any reclassifications or adjustments made by the responsible party to reflect unusual or non‑recurring items, or to correct known errors and uncertainties; and
   3. evaluating any differences between the basis of preparation of the prospective financial information and that of other financial information included in the document.

If the assurance practitioner is not able to perform the procedures in paragraph 109 of this ASAE in order to assess whether the source of the prospective financial information is appropriate, the assurance practitioner shall consider the implications for the engagement and the assurance report.

Assumptions

The assurance practitioner’s assurance procedures on the assumptions shall include:

1. reading the most recent audited or reviewed financial report, and, if appropriate, the most recently prepared annual or interim financial information, to enable the assessment of the assumptions used in the preparation of the prospective financial information;
2. enquiry of the responsible party of:
   1. the source, degree of reliability, uncertainty, verifiability, and validity of the assumptions, including whether the assumptions are objectively reasonable;
   2. the time period the assumptions cover;
   3. the methodology used in their development and quantification, including the extent to which they are affected by the responsible party’s judgement;
   4. the likelihood of the assumptions actually occurring; (Ref: Para. A91)
   5. whether the assumptions have a wide range of possibilities, or their outcomes are particularly sensitive to fluctuations, and if so, the effect on the prospective financial information of such sensitivities; and/or
   6. whether any hypothetical assumptions are included, and if so, their materiality to the prospective financial information;
3. evaluating whether all material assumptions required for the preparation of the prospective financial information have been identified;
4. determining whether the assumptions used in the preparation of the prospective financial information are consistent with the stated basis of preparation;
5. determining whether the assumptions are arithmetically correct;
6. obtaining appropriate evidence to support all material assumptions;
7. evaluating whether the assumptions are within the entity’s capacity to achieve in light of the assurance practitioner’s understanding of the prospective financial information;
8. performing, or reviewing the responsible party’s sensitivity analysis to test the responsiveness, or otherwise, of the prospective financial information to material changes in key assumptions underlying that prospective financial information; and
9. considering the responsible party’s reliance on the work of experts in relation to the assumptions.

If the responsible party’s assumptions on which the prospective financial information has been prepared lack supporting evidence, and are determined by the assurance practitioner not to have reasonable grounds, the assurance practitioner shall consider such assumptions to be hypothetical and shall determine the implications for the engagement and the assurance report, taking into account any applicable law or regulation.^[59]

Prospective Financial Information prepared in accordance with the Stated Basis of Preparation and Assumptions

The assurance practitioner’s assurance procedures to ascertain if the prospective financial information has been prepared in accordance with the stated basis of preparation and the assumptions shall include:

1. evaluating the chosen stated basis of preparation; (Ref: Para. A92)
2. assessing whether the stated basis of preparation described in the financial information section of the document is consistent with the assurance practitioner’s understanding;
3. making clerical checks such as re‑computations and reviewing internal consistency of assumptions including those with common variables (that is, the actions the responsible party intends to take are compatible with each other and there are no inconsistences in the determination of the amounts that are based on common variables, such as interest rates);
4. ensuring the prospective financial information reflects any changes made to the stated basis of preparation from the previously audited or reviewed financial report included in the document;
5. considering the interrelationships of elements within the prospective financial information;
6. agreeing or reconciling the assumptions included to the stated basis of preparation;
7. obtaining through enquiry of the responsible party, an understanding of all material assumptions and considering whether any other procedures are necessary in the circumstances; and/or
8. if applicable, in a reasonable assurance engagement:
   1. performing consistency checks in the application of the stated basis of preparation to the prospective financial information;
   2. performing test checks of items within the prospective financial information to ensure they have been prepared in accordance with the assumptions; and
   3. obtaining evidence to support an assessment of whether any uncorrected misstatements or adjustments are material, individually or in aggregate, to the prospective financial information.

Prospective Financial Information Itself

The assurance practitioner’s assurance procedures on the prospective financial information itself shall include:

1. evaluating the length of time covered by the prospective financial information, taking into account that information ordinarily becomes more speculative and less verifiable as the length of the period covered increases,^[60] and by:
   1. enquiring of the responsible party the reasons for the choice of time period;
   2. considering whether the time period is consistent with the entity’s normal reporting period and operating cycle so as to make it comparable to any previously issued historical financial information; and
   3. considering whether any elapsed portion of the current time period is included in the prospective financial information;
2. evaluating the type of business conducted by the entity, the assumptions included in the prospective financial information, and consequently the assessed volatility of the overall prospective financial information;
3. assessing the accuracy of any prospective financial information prepared in prior time periods as compared to actual financial results and obtaining and assessing the responsible party’s reasons for any significant variances; and
4. assessing whether the prospective financial information is prepared on a reasonable basis, based on evidence obtained throughout the engagement.

In addition to the requirements in paragraph 75 of this ASAE, the assurance practitioner shall request the responsible party to include in written representations confirmation:

1. of the completeness of all material assumptions used in the preparation of the prospective financial information; and
2. that the material assumptions remain appropriate, even if the underlying information has been accumulated over a period of time.

Unmodified Conclusion

The assurance practitioner shall express an unmodified conclusion in the assurance report on each element of the prospective financial information when the assurance practitioner concludes:

1. with limited assurance on each of the different elements of the prospective financial information, that based on the procedures performed, nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that:
   1. the assumptions used in the preparation of the prospective financial information, as described in section [X] of the document, do not provide reasonable grounds for the preparation of the prospective financial information;
   2. in all material respects, the prospective financial information:
      • is not prepared on the basis of the assumptions as described in section [X] of the document; and
      • is not presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
   3. the prospective financial information itself is unreasonable; or
2. with a combination of limited or reasonable assurance on each of the different elements of the prospective financial information, that based on the procedures performed:
   1. nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that the assumptions used in the preparation of the prospective financial information do not provide reasonable grounds for the prospective financial information;
   2. in all material respects, the prospective financial information:
      • is not prepared on the basis of the assumptions as described in section [X] of the document; and
      • is not presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
   3. nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that the prospective financial information is itself unreasonable.

The assurance practitioner shall not report compliance with this ASAE in the assurance report unless it includes, at a minimum, each of the elements identified in paragraph 118 of this ASAE.

Basic Elements of the Assurance Report

The assurance report shall include, at a minimum, the following elements:

1. a title that clearly indicates the report is an independent assurance report;
2. an addressee;
3. a background section that identifies the purpose of the assurance report, and if applicable, the fact that it will be included in the document;
4. statements in the scope section that:
   1. identify the entity (entities) whose prospective financial information is the subject of the assurance report and if applicable, the responsible party;
   2. identify the source of the prospective financial information being reported on, its purpose, the time period covered, and if applicable, a statement that the prospective financial information has been prepared for inclusion in the document, and that as a result, the prospective financial information may not be suitable for another purpose;
   3. cross reference to, or describe the stated basis of preparation selected by the responsible party in the preparation of the prospective financial information; and
   4. if applicable, states that the firm which the assurance practitioner is a member of holds all applicable license(s) and/or other designation(s) required under the Corporations Act 2001;
5. a description of the responsible party’s responsibilities, including those set out in paragraph 27(c) of this ASAE;
6. a description of the assurance practitioner’s responsibilities, including:
   1. a statement that the engagement was performed in accordance with this ASAE;
   2. if applicable, a summary of the assurance practitioner’s procedures.  In a limited assurance engagement, this shall include a statement “that the procedures performed in a limited assurance engagement vary in nature from, and are less in extent than for, a reasonable assurance engagement.  As a result, 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”; (Ref: Para. A93‑A95)
   3. if applicable, a statement that the engagement did not include updating or re‑issuing any previous audit or review report on the financial information used as the source of the prospective financial information;
7. statements that:
   1. actual results are likely to be different from the prospective financial information since anticipated event(s) or transaction(s) frequently do not occur as expected and the variation could be material;
   2. disclaim the assurance practitioner’s responsibility for the achievability of the results indicated by the prospective financial information; and
   3. if applicable, clearly identify any hypothetical assumptions^[61] in the prospective financial information and confirm that they have no significant impact upon the forecast outcome;
8. the assurance practitioner’s assurance conclusion on the different elements of the prospective financial information:
   1. with limited assurance and an unmodified conclusion, that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe:
      • that the assumptions used in the preparation of the prospective financial information do not provide reasonable grounds for the preparation of the prospective financial information;
      • in all material respects, that the prospective financial information is not properly prepared on the basis of the assumptions as described in section [X] of the document, and is not presented fairly in accordance with the stated basis of preparation as described in section [X] of the document]; and
      • the prospective financial information itself is unreasonable; or
   2. with limited assurance and a modified conclusion, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; or
   3. with a combination of limited and reasonable assurance on each of the different elements of the prospective financial information:
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe that the assumptions do not provide reasonable grounds for the preparation of the prospective financial information;
      • reasonable assurance that in all material respects, the prospective financial information is prepared on the basis of the assumptions as described in section [X] of the document; and is presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe the prospective financial information itself is unreasonable; or
   4. with both reasonable or limited assurance on each of the different elements of the prospective financial information, and part of the conclusion is modified, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report;
9. if applicable, an Emphasis of Matter paragraph^[62] when the assurance practitioner concludes it is necessary to draw users’ attention to a matter disclosed in the prospective financial information or accompanying explanatory notes on the basis that the matter is of such importance that it is fundamental to users’ understanding of the prospective financial information;
10. a statement that the prospective financial information has been prepared for inclusion in the document and that as a result, the prospective financial information may not be suitable for use for another purpose;
11. where the assurance practitioner has become aware of material event(s), transaction(s), correction(s), or error(s) that in the assurance practitioner’s professional judgement require comment, or adjustment to, the prospective financial information, but that are not adequately addressed in the prospective financial information and/or offering document, the assurance practitioner shall include a section covering such material event(s), transaction(s), correction(s), or error(s) and if applicable, their potential impact to the extent it can be reasonably estimated;
12. a declaration of interest, or disclosure of interest, statement;
13. if applicable, a consent statement;
14. if applicable, a liability statement;
15. if applicable, a reference to the assurance practitioner’s financial services guide;
16. the assurance practitioner’s signature;
17. the date of the assurance practitioner’s report that shall be the date the assurance practitioner signs the report; and
18. the assurance practitioner’s address

This section deals with the additional special considerations in the application of requirements in paragraphs 16 to 92 inclusive of this ASAE, when the assurance practitioner is required to provide assurance on prospective financial information that includes only hypothetical assumptions, or a mixture of assumptions and material hypothetical assumptions, resulting in a projection.  Such a projection is only for inclusion in a non-public document.^[63]

Preconditions for Acceptance

In addition to the requirements in paragraph 106 of this ASAE, the assurance practitioner shall, prior to agreeing the terms of the engagement, obtain agreement from the responsible party that they:

1. understand and accept that the assurance practitioner will not express any assurance on any hypothetical assumptions included in the projection; (Ref: Para. A96)
2. acknowledge and understand their responsibility for the preparation of the projection:
   1. for an intended use that is not for inclusion in a public document;
   2. in selecting, determining and disclosing the assumptions and hypothetical assumptions underlying the projection and their stated basis of preparation;
   3. based on hypothetical assumptions selected by the responsible party that are clearly realistic for the preparation of the projection;
   4. that takes into consideration all material implications for the assumptions and hypothetical assumptions used; and
   5. that clearly identifies and differentiates any hypothetical assumptions from other assumptions used.

Other Factors Affecting Engagement Acceptance

In addition to the requirements in paragraph 107 of this ASAE, the assurance practitioner shall accept the engagement only when:

1. on the basis of preliminary knowledge of the engagement circumstances:
   1. nothing has come to the assurance practitioner’s attention to indicate that the projection is prepared based on material hypothetical assumptions that are clearly unrealistic and/or inconsistent with the stated purpose of the projection; and
   2. the assurance practitioner considers that the intended users are able to understand that the stated basis of preparation for the projection includes hypothetical assumptions, and that these assumptions relate to future events and management actions that may not necessarily be expected to take place, or that may be expected to take place and may not be based on reasonable grounds; and
2. the preconditions for the engagement, as stated in paragraph 120 of this ASAE, are present.

Obtaining an Understanding of the Entity and Its Environment

In addition to the requirements in paragraph 36 and 37 of this ASAE, the assurance practitioner shall obtain an understanding of:

1. the assumptions used including:
   1. the use of, and materiality of, hypothetical assumptions within the projection;
   2. understanding the basis for, and calculations underlying, all material assumptions and hypothetical assumptions used in preparing the projection;
2. the stated basis of preparation chosen by the responsible party including:
   1. its relevance, completeness, reliability, and understandability; and
   2. any differences between the basis and that used in the most recent audited or reviewed historical financial information;
3. the accuracy of any projection(s) prepared in prior time periods, and the reasons for any material variances;
4. whether comparative information is to be included in the document, and whether it will be restated;
5. relevant financial information available in the public domain; and
6. key expectations and relationships in the projection for use when designing and performing analytical procedures.

Assurance Procedures

Hypothetical Assumptions

In addition to the requirements in paragraphs 109 to 114 inclusive of this ASAE, the assurance procedures performed on assumptions that are hypothetical shall include: (Ref: Para. A97)

1. enquiry of the responsible party of:
   1. the source, degree of reliability, uncertainty, and validity of the assumptions including whether the assumptions are objectively reasonable;
   2. the time period the hypothetical assumptions cover;
   3. the methodology used in their development and quantification, including the extent to which they are affected by the responsible party’s judgement;
   4. the likelihood of the hypothetical assumptions actually occurring;
   5. whether the hypothetical assumptions have a wide range of possibilities, or their outcomes are particularly sensitive to fluctuations, and if so, the effect on the projection of such sensitivities; and
   6. of the materiality of hypothetical assumptions to the projection;
2. determining whether material hypothetical assumptions are:
   1. arithmetically correct;
   2. consistent with the stated basis of preparation of the projection;
   3. consistent with the purpose of the projection;
3. evaluating whether all material hypothetical assumptions are within the entity’s capacity to achieve in light of the assurance practitioner’s understanding of the projection;
4. evaluating whether all significant implications of the hypothetical assumptions have been taken into consideration by the responsible party;
5. if applicable, considering the responsible party’s reliance on the work of experts in relation to the projection, or the hypothetical assumptions underlying it; and
6. evaluating whether anything has come to the assurance practitioner’s attention during the engagement that causes the assurance practitioner to believe that any of the material hypothetical assumptions are clearly unrealistic;
7. performing, or reviewing the responsible party’s sensitivity analysis to test the responsiveness, or otherwise, of the projection to material changes in key hypothetical assumptions underlying that projection; and
8. considering whether anything has come to the assurance practitioner’s attention that may result in the intended users of the projection being misled by the inclusion of hypothetical assumptions.

Projection Itself

The assurance practitioner’s assurance procedures on the projection itself shall include evaluating whether the projection reflects all assumptions and hypothetical assumptions, consistent with the stated basis of preparation.

In addition to the requirements in paragraph 115 of this ASAE, the assurance practitioner shall request the responsible party to include in the written representations an acknowledgement of their responsibilities for the matters described in paragraph 120 of this ASAE.

The assurance practitioner shall not report compliance with this ASAE in the assurance report unless it includes, at a minimum, each of the elements identified in paragraph 127 of this ASAE.

Basic Elements of the Assurance Report

In addition to the requirements in paragraph 118 of this ASAE, the assurance report shall include, at a minimum, the following elements:

1. statements in the scope section that:
   1. identify the projection being reported on, its purpose, the time period covered, and if applicable, a statement that the projection has been prepared for inclusion in the document, and that as a result, the projection may not be suitable for another purpose;
   2. cross reference to, or describe the stated basis of preparation selected by the responsible party for the projection; (Ref: Para. A98)
2. the assurance practitioner’s assurance conclusion on the different elements of a projection that includes both assumptions and hypothetical assumptions:
   1. with limited assurance and an unmodified conclusion, that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe:
      • that the assumptions do not provide reasonable grounds for the preparation of the projection, giving the occurrence of hypothetical assumptions;
      • in all material respects, that the projection is not properly prepared on the basis of the assumptions and the hypothetical assumptions as described in section [X] of the document; and is not presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • the projection itself is unreasonable; or
   2. with limited assurance and a modified conclusion, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; or
   3. with a combination of limited and reasonable assurance on each of the different elements of the projection:
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe the assumptions do not provide reasonable grounds for the preparation of the projection giving the occurrence of hypothetical assumptions;
      • reasonable assurance that in all material respects, the projection is prepared on the basis of the assumptions as described in section [X] of the document; and is presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe the projection itself is unreasonable; or
      • with both reasonable and limited assurance on each of the different elements of the projection, and part of the conclusion is modified, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; or
3. the assurance practitioner’s assurance conclusion on the different elements of a projection that includes only hypothetical assumptions:
   1. with limited assurance and an unmodified conclusion, that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe:
      • in all material respects, that the projection is not properly prepared on the basis of the hypothetical assumptions as described in section [X] of the document; and is not presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • the projection itself is unreasonable; or
   2. with limited assurance and a modified conclusion, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; or
   3. with a combination of limited and reasonable assurance on each of the different elements of the projection:
      • reasonable assurance that in all material respects, the projection is prepared on the basis of the hypothetical assumptions as described in section [X] of the document; and is presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe the projection itself is unreasonable; or
      • with both reasonable and limited assurance on each of the different elements of the projection, and part of the conclusion is modified, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report.

This section deals with the additional special considerations in the application of requirements in paragraphs 16 to 92 inclusive of this ASAE, when the assurance practitioner is required to provide assurance on prospective financial information in the form of a pro forma forecast. 

Preconditions for Acceptance

In addition to the requirements in paragraph 106 of this ASAE, the assurance practitioner shall obtain agreement from the responsible party that they acknowledge and understand their responsibility for:

1. selecting the basis of preparation of the pro forma forecast;
2. selecting the unadjusted forecast financial information used as the source of the pro forma forecast;
3. selecting and determining the pro forma adjustments; preparing the pro forma forecast in accordance with the stated basis of preparation.

Other Factors Affecting Engagement Acceptance

In addition to the requirements in paragraph 107 of this ASAE, the assurance practitioner shall only accept the engagement if the level of assurance to be provided on the pro forma forecast is not higher than the level of assurance expressed on the source of the unadjusted financial information, in circumstances where it has been previously audited or reviewed. (Ref: Para. A99)

Obtaining an Understanding of the Entity and Its Environment

In addition to the requirements in paragraphs 37 and 38 of this ASAE, the assurance practitioner shall obtain:

1. an understanding of the source of the unadjusted financial information used in the preparation of the pro forma forecast including:
   1. whether it has been previously audited or reviewed; and
   2. if the audit opinion/review conclusion was modified, considering the implications, if any for the pro forma forecast; including:
      • what appropriate action to take; (Ref: Para. A100‑A101) and
      • whether there is any effect on the assurance practitioner’s ability to report in accordance with the terms of the engagement, including any effect on the assurance report; or
   3. planning the additional procedures required if the source of the unadjusted financial information has not been previously audited or reviewed;
2. an understanding of the stated basis of preparation for the pro forma forecast;
3. an understanding of the pro forma adjustments:
   1. identifying all the adjustments made that have been made and the event(s) or transaction(s) the effects of which they intend to record;
   2. an understanding of the event(s) or transaction(s) that the pro forma adjustments are intending to record; and
   3. understanding the methodology used by the responsible party in formulating the pro forma adjustments, including the basis for, and calculations underlying them;^[64]
4. an understanding of any recent key changes in the entity’s business activities, and how they affect the pro forma forecast;
5. an understanding of whether experts^[65] are required to be used for the assurance engagement for:
   1. evaluating pro forma adjustments, including whether they were prepared in accordance with the stated basis of preparation;
   2. evaluating the suitability of the stated basis of preparation; and
   3. assessing the impact of any contractual requirements on the pro forma forecast. 

Assurance Procedures

In addition to the requirements in paragraphs 109 to 114 inclusive of this ASAE, the assurance procedures performed on the pro forma forecast shall include:

1. if the source of the unadjusted financial information has not been previously audited or reviewed, such procedures as are necessary, in the assurance practitioner’s professional judgement, to obtain sufficient appropriate evidence in relation to that financial information on which to rely for engagement purposes; (Ref: Para. A102)
2. if the source of the unadjusted historical financial information has been previously audited or reviewed, such procedures as are necessary, in the assurance practitioner’s professional judgement, to obtain sufficient appropriate evidence on which to rely for engagement purposes; (Ref: Para. A103)
3. determining whether the pro forma adjustments: (Ref: Para. A104‑A105)
   1. are directly attributable to the event(s) or transaction(s) requiring the preparation of the pro forma forecast;
   2. have been selected and applied by the responsible party on a basis consistent with the stated basis of preparation;
   3. are supported by sufficient appropriate evidence, and are arithmetically correct;^[66]
   4. reflect the planned event(s) or transaction(s) in the time period in which they are expected to occur; and
4. determining whether the resultant pro forma forecast reflects the results of applying the pro forma adjustments to the unadjusted financial information.

If the assurance practitioner is not satisfied that the pro forma adjustments:

1. have been made in accordance with the stated basis of preparation, and/or
2. lack sufficient appropriate evidence;

the assurance practitioner shall discuss this with the responsible party, and:

3. if the responsible party agrees to make a revision of the pro forma adjustments, the assurance practitioner shall request an updated copy of the document in order to ensure the revision has been made; or
4. if the responsible party refuses to make the required revision to the pro forma adjustments, the assurance practitioner shall consider whether to:
   1. obtain expert advice on the appropriate course of action of the assurance practitioner;
   2. withdraw consent for the responsible party to include the assurance report in the document; and/or
   3. withdraw from the engagement, where withdrawal is possible under applicable law or regulation.

In addition to the requirements in paragraph 115 of this ASAE, the assurance practitioner shall request the responsible party to include in the written representations an acknowledgement of their responsibilities for the matters described in paragraph 129 of this ASAE.

The assurance practitioner shall not report compliance with this ASAE in the assurance report unless it includes, at a minimum, each of the elements identified in paragraph 136 of this ASAE.

Basic Elements of the Assurance Report

In addition to the requirements in paragraph 118 of this ASAE, the assurance report shall include, at a minimum, the following elements:

1. statements in the scope section that:
   1. identify the pro forma forecast being reported on, including the time period covered, and if applicable, a statement that the pro forma forecast has been prepared for inclusion in the document, and that as a result, the pro forma forecast may not be suitable for another purposes;
   2. if applicable, identify whether there has been an audit or review conducted on the source from which the unadjusted financial information was prepared;
   3. cross reference to, or describe the stated basis of preparation selected by the responsible party for the pro forma forecast; (Ref: Para. A106)
2. the assurance practitioner’s assurance conclusion on the different elements of the pro forma forecast:
   1. with limited assurance and an unmodified conclusion, that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe:
      • that the assumptions do not provide reasonable grounds for the pro forma forecast;
      • in all material respects, that the pro forma forecast is not properly prepared on the basis of the assumptions as described in section [X] of the document; and is not presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • the pro forma forecast itself is unreasonable; or
   2. with limited assurance and a modified conclusion, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report; or
   3. with a combination of limited and reasonable assurance on each of the different elements of the pro forma forecast:
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe the assumptions do not provide reasonable grounds for the preparation of the pro forma forecast;
      • reasonable assurance that in all material respects, the pro forma forecast is prepared on the basis of the assumptions as described in section [X] of the document; and is presented fairly in accordance with the stated basis of preparation as described in section [X] of the document; and
      • limited assurance that nothing has come to the assurance practitioner’s attention that causes the assurance practitioner to believe the pro forma forecast itself is unreasonable; or
   4. with both reasonable and limited assurance on each of the different elements of the pro forma forecast, and part of the conclusion is modified, a clear description of the reasons for the modification, with the effects appropriately quantified, to the extent reasonably practical, and disclosed in the assurance report.