For the purposes of this Standard, the following terms have the meanings attributed below:
(a) Applicable criteria - the specific criteria used by the responsible party in preparing
and presenting the genera1 purpose water accounting report.
(b) Assertions - representations by the responsible party, explicit or otherwise, that are embodied in the general purpose water accounting report, as used by the assurance practitioner to consider the different types of potential misstatements that may occur.
(c) Assurance engagement - an engagement in which an assurance practitioner aims to obtain sufficient appropriate evidence in order to express a conclusion designed to enhance the degree of confidence of the intended users other than the responsible party about the subject matter information (that is, the outcome of the measurement or evaluation of an underlying subject matter against criteria). Each assurance engagement is classified in two dimensions:
(i) Either a reasonable assurance engagement or a limited assurance engagement:
a. 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 opinion on the outcome of the measurement or evaluation of the underlying subject matter against criteria.
a. 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 expressing a conclusion 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 subject matter information is materially misstated. 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 subject matter information to a degree that is clearly more than inconsequential. (Ref: Para. A5-A8 and A82)
(ii) Either an attestation engagement or a direct engagement:
a. Attestation engagement - an assurance engagement in which a party other than the assurance practitioner measures or evaluates the underlying subject matter against the criteria. A party other than the assurance practitioner also often presents the resulting subject matter information in a report or statement. In some cases, however, the subject matter information may be presented by the assurance practitioner in the assurance report. In an attestation engagement, the assurance practitioner's conclusion may be phrased in terms of;
(i) The underlying subject matter and the applicable criteria;
(ii) The subject matter information and the applicable criteria; or
(iii) A statement made by the appropriate party.
b. Direct engagement - an assurance engagement in which the assurance practitioner measures or evaluates the underlying subject matter against the applicable criteria and the assurance practitioner presents the resulting subject matter information as part of, or accompanying, the assurance report. In a direct engagement, the assurance practitioner's conclusion addresses the reported outcome of the measurement or evaluation of the underlying subject matter against the criteria.
(d) Assurance practitioner - the individual, firm or other organisation, whether in public practice, industry and commerce, or the public sector, conducting an assurance engagement. Where this Standard expressly intends that a requirement or responsibility be fulfilled by the lead assurance practitioner, the term "lead assurance practitioner" rather than "assurance practitioner" is used.
(e) Assurance practitioner's expert - an individual or organisation possessing expertise in a field other than assurance, whose work in that field is used by the assurance practitioner to assist the assurance practitioner in obtaining sufficient appropriate assurance evidence. An assurance practitioner's expert may be either an assurance practitioner's internal expert (who is a partner or staff, including temporary staff, of the assurance practitioner's firm or a network finn), or an assurance practitioner's external expert.
Assurance skills and techniques - those planning, evidence gathering, evidence e\"aluation, communication and reporting skills and techniques demonstrated by an assurance practitioner that are distinct from expertise in the underlying subject matter of any particular assurance engagement or its measurement or evaluation.
(Ref: Para. A9)
(g) Australian Water Accounting Standards-water accounting standards issued by the Bureau of Meteorology in accordance with its functions under the Commonwealth Water Act 2007.
(h) Comparative information - the volumes and disclosures included in the general purpose water accounting report in respect of one or more prior periods.
(i) Control activities - the actions established by policies and procedures that help ensure that management directives to mitigate the risks to the achievement of objectives are carried out.
(j) Control environment - the governance and management functions and the attitudes, awareness and actions of those charged with governance and management concerning internal control and its importance. The control environment is a component of internal control.
(k) Criteria - the benchmarks used to quantify or evaluate the underlying subject matter. AWAS 1 provides criteria for the preparation and presentation of a general purpose water accounting report (see also paragraph 15(a)). (Ref: Para. AIO)
(1) Engagement risk - the risk that the assurance practitioner expresses an inappropriate conclusion when the general purpose water accounting report is materially misstated.
(m) Engaging party- the party (or parties) engaging the assurance practitioner to perform the assurance engagement.
(n) Engagement team - all assurance practitioners and staff performing the assurance engagement, and any individuals engaged by the firm or a network firm who perform procedures on the engagement. This excludes an assurance practitioner's external expert engaged by the firm or a network firm.
(o) Firm - a sole assurance practitioner, partnership or corporation or other entity of individual assurance practitioners. "Firm" should be read as referring to its public sector equivalents where relevant.
(p) Fraud - an intentional act by one or more individuals among those charged with governance, management, employees, or third parties, involving the use of deception to obtain unjust or illegal advantage.
(q) Further procedures - procedures performed in response to assessed risks of material misstatement, including tests of controls (if any), tests of details and analytical procedures.
(r) General purpose water accounting report - a water accounting report intended to meet the information needs common to users who are unable to command the preparation of water accounting reports tailored to satisfy their information needs. A general purpose water accounting report is prepared in accordance with Australian Water Accounting Standards. AWAS 1 states that a general purpose water accounting report comprises the water accounting statements, accompanying note disclosures, accountability statement and contextual statement This Standard deals with assurance engagements to report on the water accounting statements, note disclosures and accountability statement only. It does not cover the contextual statement, which is not subject to assurance. Accordingly, where appropriate in this Standard, the term "general purpose water accounting report" is to be read as meaning those components that are coYered by the assurance engagement.
(s) Initial assurance engagement - an engagement in which either:
(i) the general purpose water accounting report has been prepared and assured for the first time;
(ii) the general purpose water accounting report for the prior period was not assured; or
(iii) the general purpose water accounting report for the prior period was assured by a predecessor assurance practitioner.
(t) Lead assurance practitioner - the person in the firm who is responsible for the assurance engagement and its performance, and for the assurance report that is issued on behalf of the firm, and who, where required, has the appropriate authority from a professional, legal or regulatory body. "Lead assurance practitioner" should be read as referring to its public sector equivalents where relevant.
(u) Management - for the purposes of this Standard, management refers to those with executive responsibility for the preparation and presentation of the general purpose water accounting report, including water accounting and reporting, unless otherwise specified. In some instances, management includes some or all of those charged with governance, for example, executive members of a governance board, or an
(v) Management's expert- an individual or organisation possessing expertise in a field other than water accounting or assurance, whose work in that field is used by management or those charged with governance to assist them in preparing the general purpose water accounting report.
(w) Materiality - information is material if its omission from, or misstatement in, a general purpose water accounting report has the potential to influence decisions of users of that report, or the discharge of accountability by management or those charged with governance.
(x) Misstatement - a difference between the general purpose water accounting report and the appropriate measurement or evaluation of the underlying subject matter against the criteria. Misstatements can be intentional or unintentional, qualitative or quantitative, and include omissions.
(y) Opening balances- account balances that exist at the beginning of the period. Opening balances are based upon the closing balances of the prior period and matters requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.
(z) Performance materiality - the amount or amounts set by the assurance practitioner at less than materiality for the general purpose water accounting report to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the general purpose water accounting report.
(aa) Predecessor assurance practitioner - the assurance practitioner from a different firm who conducted the assurance engagement on the general purpose water accounting report in the prior period and who has been replaced by the assurance practitioner for the current period.
(bb) Professional judgement - the application of relevant training, knowledge and experience, within the context provided by assurance and ethical standards, in making informed decisions about the courses of action that are appropriate in the circumstances of the assurance engagement.
(cc) Professional scepticism - an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement, and a critical assessment of evidence.
(dd) Re-performance - the assurance practitioner's independent execution of procedures or controls that were originally performed by the responsible party.
(ee) Reporting period- the period for which a water accounting report is prepared.
(ff) Responsible party - those charged with governance or management, as appropriate, responsible for the preparation and presentation of the general purpose water accounting report. (Ref: Para. Al J-Al3)
(gg) Special purpose water accounting report - a water accounting report tailored to the information needs of a user able to command this information.
(hh) Subject matter information - the information that results from applying the criteria to the underlying subject matter. The subject matter information in an engagement conducted under this Standard is the general purpose water accounting report.
(ii) Those charged with governance - the person(s) or organisation(s) (for example, a corporate trustee) with responsibility for overseeing the strategic direction of an entity and obligations related to the accountability of the entity. For the purposes of this Standard, those charged with governance refers to those with overall responsibility for, and obligations related to, the preparation and presentation of the general purpose water accounting report, including overseeing the water accounting and reporting process. For some entities, those charged with governance may include management personnel, for example, executive members of a governance board of a private or public sector entity, or an owner-manager.
(jj) Underlying subject matter - the subject matter that is measured or evaluated by applying criteria. In an engagement conducted under this Standard the underlying subject matter is the water assets, water liabilities, changes in water assets and water liabilities, and water flows of a water report entity.
(kk) Water - the liquid that descends from clouds as rain and forms streams, lakes, groundwater aquifers and seas. Water is a chemical compound comprising two atoms of hydrogen and one atom of oxygen. Water may exist in solid, liquid or gaseous form.
(ll) Water accounting report - may be either a general purpose water accounting report or a special purpose water accounting report.
(mm) Water accounting statements- comprise the statement of water assets and water liabilities, the statement of changes in water assets and water liabilities, and the statement of water flows.
(nn) Water asset- water, or the rights or other claims to water, which the water report entity holds or transfers, and from which the water report entity, or stakeholders of the water report entity, derive future benefits.
(oo) Water entity - an entity that:
(i) Holds or transfers water, or
(ii) Holds or transfers rights or other direct or indirect claims to water, or
(iii) Has inflows and/or outflows of water.
(pp) Water liability- a present obligation of the water report entity, the discharge of which is expected to result in a decrease in the water report entity's water assets or an increase in another water liability.
(qq) Water report entity - a water entity in respect of which it is reasonable to expect the existence of users who depend on general purpose water accounting reports for information about water, or rights or other claims to water, which will be useful to them for making and evaluating decisions about the allocation of resources.
The definitions in ASAE 3000 also apply to this Standard.
AWAS I and the Water Accounting Conceptual Framework/or the Preparation and Presentation of General Purpose Water Accounting Reports (WACF) provide criteria for the preparation and presentation ofa general purpose w.iteraccounting report. See AWAS I, paragraphs 2-3