For the purposes of this Auditing Standard, the following terms have the meanings attributed below:
Assurance engagement means an engagement in which an assurance practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users, other than the responsible party, about the outcome of the evaluation or measurement of a subject matter against criteria.
Assurance practitioner means an individual, firm, or other organisation, whether in public practice, industry and commerce, or the public sector conducting assurance engagements, or related services engagements (including engagements to perform agreed-upon procedures).
Date of report means the date the assurance practitioner signs the report.
Engagement documentation means the record of work performed, relevant evidence obtained, and conclusions the assurance practitioner reached (terms such as “working papers” or “workpapers” are sometimes used).
Engagement partner means the partner or other person in the firm who is responsible for the engagement and its performance, and for the report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body. Engagement partner should be read as referring to a public sector equivalent where relevant.
Engagement quality control review means a process designed to provide an objective evaluation, on or before the date of the report, of the significant judgements the engagement team made and the conclusions it reached in formulating the report. The engagement quality control review process is for audits of financial reports of listed entities, and those other engagements, if any, for which the firm has determined an engagement quality control review is required.
Engagement quality control reviewer means a partner, other person in the firm, suitably qualified external person, or a team made up of such individuals, none of whom is part of the engagement team, with sufficient and appropriate experience and authority to objectively evaluate the significant judgements the engagement team made and the conclusions it reached in formulating the report.
Engagement team means all partners and staff performing the engagement, and any individuals engaged by the firm or a network firm who perform procedures on the engagement. This excludes an auditor’s external expert engaged by the firm or by a network firm.
Firm means a sole practitioner, partnership or corporation or other entity of assurance practitioners. Firm should be read as referring to a public sector equivalent where relevant.
Inspection means, in relation to completed engagements, procedures designed to provide evidence of compliance by engagement teams with the firm’s quality control policies and procedures.
Limited assurance engagement means an assurance engagement where the assurance practitioner’s objective is a reduction in assurance engagement risk to a level that is acceptable in the circumstances of the assurance engagement, but where that risk is greater than that for a reasonable assurance engagement, as the basis for a negative form of expression of the assurance practitioner’s conclusion. A limited assurance engagement is commonly referred to as a review.
Listed entity means an entity whose shares, stock or debt are quoted or listed on a recognised stock exchange, or are marketed under the regulations of a recognised stock exchange or other equivalent body.
Monitoring means a process comprising an ongoing consideration and evaluation of the firm’s system of quality control, including a periodic inspection of a selection of completed engagements, designed to provide the firm with reasonable assurance that its system of quality control is operating effectively.
Network firm means a firm or entity that belongs to a network.
Network means a larger structure:
- That is aimed at cooperation, and
- That is clearly aimed at profit or cost‑sharing or shares common ownership, control or management, common quality control policies and procedures, common business strategy, the use of a common brand name, or a significant part of professional resources.
Other financial information means historical financial information and information other than historical financial information (for example, prospective financial information).
Partner means any individual with authority to bind the firm with respect to the performance of an audit, review, other assurance engagement or related services engagement. Partner should be read as referring to a public sector equivalent where relevant.
Personnel means partners and staff.
AUASB Standards means standards issued by the AUASB, comprising:
- Australian Auditing Standards, which means the suite of auditing standards issued by the AUASB, comprising:
- Standards on Review Engagements;
- Standards on Assurance Engagements; and
- Standards on Related Services.
Reasonable assurance means a high, but not absolute, level of assurance.
Staff means professionals, other than partners, including any experts the firm employs.
Suitably qualified external person means an individual outside the firm with the competence and capabilities to act as an engagement partner. For example:
- a partner of another firm, or
- a member (with appropriate experience) of a professional accountancy body* whose members may perform audits and reviews of financial reports and other financial information, other assurance engagements or related services engagements, or
- a member (with appropriate experience) of an organisation that provides relevant quality control services.
[Footnote deleted by the AUASB.]
See ASA 610 Using the Work of Internal Auditors, paragraph Aus 1.2. The use of internal auditors to provide direct assistance is prohibited in an audit or review conducted in accordance with the Australian Auditing Standards.
For example, Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants.