For the purposes of this Guidance Statement the following words and phrases have the meanings attributed below:

Criteria - the benchmarks used to measure or evaluate the underlying subject matter. An applicable financial reporting framework is an example of “criteria”.

Engagement risk - the risk of expressing inappropriate opinions and/or conclusions when the subject matter is materially misstated, including when the subject matter has material deficiencies or deviations or is materially non-compliant.

Grant acquittal - a requirement of a funding agreement and is performed by the recipient of the funding (the responsible party). An acquittal can take a number of forms such as financial reports/statements, written reports, documentation of activities performed and attestations/declarations by the funding recipient. Some funding agreements require independent assurance in relation to the acquittal, or parts thereof. In this Guidance Statement, “grant acquittal” relates to the auditor’s engagement under the funding agreement.

Mandate - the requirement, documented or otherwise, for an independent auditor to conduct an audit, other assurance engagement, agreed-upon procedures engagement or combination thereof. Mandates may be prescribed in legislation or regulation; or may be specified by contract or agreement.

Prescribed procedures - procedures that are to be performed by the auditor in accordance with the prescribed requirements of a statutory authority, a contract or other applicable mandate.

Prescribed report - the form and/or content of the auditor’s report is prescribed by a statutory authority, by the terms of a contract or by other applicable mandate.

Subject matter information - the outcome of the measurement or evaluation of an underlying subject matter against the relevant criteria. [Examples include financial reports, compliance plans and attestations/declarations by responsible parties]

The meanings of other words and phrases used in this Guidance Statement are those included in the AUASB pronouncements and which are also reproduced in the AUASB Glossary.