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Quality in performance engagements set to step up

Stakeholders in the public sector are set to benefit from strengthened performance engagements, following the Auditing and Assurance Standards Board’s (AUASB) issuance of a new standard on assurance engagements, ASAE 3500 Performance Engagements.

Auditors-General undertake hundreds of performance engagements every year in Australia. These engagements provide assurance to citizens about the efficiency, effectiveness and economy of public sector programs. The new standard is intended to revise and update how performance audits are done in Australia to reflect current public sector auditing best practice and improve their consistency and quality.

Auditor-General for Western Australia and AUASB Member, Colin Murphy commented, “This standard has really stepped up how we conduct performance engagements in the public sector. It is very relevant to users and retains all of the elements and the principles that are required in the standard. You can now pick up any Auditor-General’s performance audit report and see that the key attributes of a conclusion and the criteria applied are all clearly identified, so there’s a consistent format and approach. It assists readers’ understanding of those audits, it helps us compare across jurisdictions, and it facilitates peer reviews.”

The new standard is the result of extensive consultation undertaken by the AUASB, who engaged and collaborated with a range of stakeholders during the development of the new standard, including representatives from Australia’s Auditor-General offices and academics. Comparable international standards were also studied and compared against Australia’s model.

AUASB Chair Professor Roger Simnett said, “We are proud to deliver a standard that strengthens our suite of Australian-specific standards that in this case directly meets the public sector’s needs. It has been particularly gratifying to see the cooperation and coordination amongst the various bodies that contributed to its development”.

The new standard provides a stronger emphasis on applying a risk-based approach to performance engagements, clarifies when the understanding, design and implementation of internal controls is required and now aligns with ASAE 3000 Assurance Engagements on Assurance Engagements Other than Audits or Reviews of Historical Financial Informationwhich was revised in 2014.