Australian Water Accounting Standard 1 Preparation and Presentation of General Purpose Water Accounting Reports (AWAS 1) requires a general purpose water accounting report to be subjected to assurance to establish whether the report is presented fairly in accordance with that Standard.
Scope of this Standard on Assurance Engagements
AWAS 1 states that a general purpose water accounting report comprises the following components:
In some instances a statement of changes in water assets and water liabilities need not be presented in a general purpose water accounting report. See AWAS 1.
In some instances the statement of changes in water assets and water liabilities may be combined with the statement of water flows. See AWAS 1.
In some instances a statement of water flows need not be presented in a general purpose water accounting report. See AWAS 1.
AWAS 1 describes the contextual statement and the information that may be included in a contextual statement.
This Standard deals with assurance engagements to report on the water accounting statements, note disclosures and the accountability statement only. It does not cover the contextual statement, which is not subject to assurance. However, the assurance practitioner reads the contextual statement to identify material inconsistencies, if any, with the other components of the general purpose water accounting report.
(Ref: Para. 91, A157-A163)
This Standard does not deal with, or provide specific guidance for, assurance engagements to report on the following: Water accounting reports prepared in accordance with special purpose water reporting frameworks. Single components of a general purpose water accounting report or specific elements, accounts or items of a component. Water-related information not included in paragraph 5 of this Standard. This Standard may nonetheless provide guidance that may be useful in conducting such engagements. (Ref: Para. A1)
Attestation and Direct Engagements
The Framework for Assurance Engagements (Assurance Framework) and ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ASAE 3000) note that an assurance engagement may be either an attestation engagement or a direct engagement. This Standard deals only with attestation engagements.
Procedures for Reasonable Assurance and Limited Assurance Engagements
ASAE 3000 notes that an assurance engagement may be either a reasonable assurance engagement or a limited assurance engagement. This Standard deals with both reasonable and limited assurance engagements. (See paragraph 15(c) of this Standard)
In both reasonable assurance and limited assurance engagements on a general purpose water accounting report, the assurance practitioner chooses a combination of assurance procedures, which can include: inspection, observation, confirmation, recalculation, re-performance, analytical procedures and enquiry. Determining the assurance procedures to be performed on a particular engagement is a matter of professional judgement Because general purpose water accounting reports cover a wide range of water report entities, the nature, timing and extent of procedures are likely to vary considerably from engagement to engagement.
Unless otherwise stated, each requirement of this Standard applies to both reasonable and limited assurance engagements. Because the level of assurance obtained in a limited assurance engagement is lower than in a reasonable assurance engagement, the procedures the assurance practitioner performs in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement.7 Requirements that apply to only one or the other type of engagement have been presented in a columnar format with the letter "L" (limited assurance) or "R" (reasonable assurance) after the paragraph number. Although some procedures are required only for reasonable assurance engagements, they may nonetheless be appropriate in some limited assurance engagements (see also paragraph A82 of this Standard, which outlines the primary differences between the assurance practitioner's further procedures for a reasonable assurance engagement and a limited assurance engagement on a general purpose water accounting report). (Ref: Para. A2, A82)
Relationship with ASAE 3000, Other Pronouncements and Other Requirements
The assurance practitioner is required to comply with ASAE 3000 and this Standard when performing an assurance engagement to report on a general purpose water accounting report. This Standard supplements, but does not replace, ASAE 3000 and expands on how ASAE 3000 is to be applied in an assurance engagement to report on a general purpose water accounting report. (Ref: Para. A14)
Compliance with ASAE 3000 requires, among other things, that the assurance practitioner comply with relevant ethical requirements related to assurance engagements. It also requires the lead assurance practitioner to be a member of a firm that applies ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, Other Assurance Engagements and Related Services Engagements (ASQC 1).(Ref: Para. A3-A4)
The term "lead assurance practitioner " is referred to in ASQC I as "engagement partner"
Where the assurance engagement is subject to law or regulation, this Standard does not override that law or regulation. In the event that law or regulation differs from this Standard, an engagement conducted in accordance with that law or regulation will not automatically comply with this Standard. The assurance practitioner is entitled to represent compliance with this Standard in addition to compliance with law or regulation only when all applicable requirements of this Standard have been met.