For the purposes of this ASAE, the following terms have the meanings attributed below:
Activity―a government or private sector provision of products or services, system, operation, function or programme which may be conducted within a single entity or across multiple entities, departments, agencies, joint ventures or other organisations, within a single jurisdiction or across multiple jurisdictions.
Assurance practitioner―individual or firm or other organisation, whether in public practice, industry and commerce, or the public sector, providing assurance services including performance engagements. Where this ASAE expressly intends that a requirement or responsibility be fulfilled by the lead assurance practitioner, the term the “lead assurance practitioner” rather than “assurance practitioner” is used.
Attestation engagement―An assurance engagement in which a party other than the assurance practitioner measures or evaluates the underlying subject matter against the criteria. The outcome of that measurement or evaluation is often presented in a report or statement.
Criteria―The benchmarks used to measure or evaluate the underlying subject matter, which in a performance engagement is the activity. The “identified criteria” are the criteria used for the particular engagement.
Direct engagement on performance―A reasonable assurance engagement in which the assurance practitioner evaluates the activity’s performance against the identified criteria. The outcome of the assurance practitioner’s evaluation is expressed in the assurance practitioner’s conclusion.
Economy―the performance principle relating to the minimisation of the costs of resources, within the operational requirements of timeliness and availability of required quantity or quality.
Effectiveness―the performance principle relating to the extent to which the intended objectives at a program or entity level are achieved.
Efficiency―the performance principle relating to the minimisation of inputs employed to deliver the intended outputs in terms of quality, quantity and timing.
Engagement risk―the risk that the assurance practitioner expresses an inappropriate conclusion.
Engaging party―The party(ies) that engages the assurance practitioner to perform the assurance engagement. In a performance engagement initiated by an Auditor‑General there will not normally be an engaging party as the State, Territory or Federal Parliament provide the mandate for the Auditor‑General to conduct performance engagements, but will not usually engage the Auditor‑General to perform specific performance engagements.
Intended users―Parliament, responsible party, individual(s) or organisation(s), or group(s) thereof that the assurance practitioner expects will use the assurance report. In some cases, there may be intended users other than those to whom the assurance report is addressed, such as the general public if the assurance report is made publicly available.
Limited assurance engagement―An assurance engagement in which the assurance practitioner reduces engagement risk to a level that is acceptable in the circumstances of the engagement, but where that risk is greater than for a reasonable assurance engagement as the basis for the assurance practitioner’s conclusion. The assurance practitioner’s conclusion is expressed in a form that conveys whether, based on the procedures performed and evidence obtained a matter(s) has come to the assurance practitioner’s attention to cause the assurance practitioner to believe the activity has not been performed with respect to economy, efficiency and/or effectiveness as evaluated against the identified criteria. The nature, timing and extent of procedures performed in a limited assurance engagement is limited compared with that necessary in a reasonable assurance engagement but is planned to obtain a level of assurance that is, in the assurance practitioner’s professional judgement, meaningful. To be meaningful, the level of assurance obtained by the assurance practitioner is likely to enhance the intended users’ confidence about the performance of the activity to a degree that is clearly more than inconsequential.
Materiality—variations in performance of an activity evaluated against the identified criteria which, have the potential to affect the economy, efficiency and/or effectiveness of the activity and be reasonably expected to influence relevant decisions of the intended users or the discharge of accountability by the responsible party or governing body of the entity.
Objective of a performance engagement―is to evaluate the performance of an activity or activities, with respect to economy, efficiency and/or effectiveness against the identified criteria.
Performance engagement―An assurance engagement to conclude on the performance (expressed as either economy, efficiency and/or effectiveness) of all or a part of the activity or activities of an entity or across multiple entities as evaluated by identified criteria, commonly referred to as a performance audit.
Professional scepticism―an attitude that includes a questioning mind, being alert to the validity of evidence obtained and to critically assess evidence that contradicts or brings into question the reliability of documents and responses to enquiries and other information obtained.
Reasonable assurance engagement―An assurance engagement in which the assurance practitioner reduces engagement risk to an acceptably low level in the circumstances of the engagement as the basis for the assurance practitioner’s conclusion. The assurance practitioner’s conclusion is expressed in a form that conveys the assurance practitioner’s conclusion on the outcome of the evaluation of the activity against identified criteria.
Representation―Statement by the responsible party, either oral or written, provided to the assurance practitioner to confirm certain matters or to support other evidence.
Responsible party―The party responsible for the performance of all or part of the activity, which is the subject matter of the performance engagement.
Subject matter or underlying subject matter―The activity which is evaluated or measured against the identified criteria.
Variation ―An instance where the performance of the underlying subject matter exceeds the identified criteria or is deficient in whole or part, as evaluated against the identified criteria.