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Definitions A

Access control to Australian Water Accounting Standards

Term Definition
Access control

procedures designed to restrict access to on line terminal devices, programs and data. Access controls consist of “user authentication” and “user authorisation”. “User authentication” typically attempts to identify a user through unique logon identifications, passwords, access cards or biometric data. “User authorisation” consists of access rules to determine the computer resources each user may access. Specifically, such procedures are designed to prevent or detect:

  • Unauthorised access to on line terminal devices, programs and data;
  • Entry of unauthorised transactions;
  • Unauthorised changes to data files;
  • The use of computer programs by unauthorised personnel; and
  • The use of computer programs that have not been authorised.
Accounting estimate  an approximation of a monetary amount in the absence of a precise means of measurement. This term is used for an amount measured at fair value where there is estimation uncertainty, as well as for other amounts that require estimation. Where this Auditing Standard addresses only accounting estimates involving measurement at fair value, the term fair value accounting estimates is used. 
Accounting records  the records of initial accounting entries and supporting records, such as cheques and records of electronic fund transfers; invoices; contracts; the general and subsidiary ledgers, journal entries and other adjustments to the financial report that are not reflected in journal entries; and records such as work sheets and spreadsheets supporting cost allocations, computations, reconciliations and disclosures.
Activity  a government or private sector provision of products or services, system, operation, function or program which may be conducted within a single entity or across multiple entities, departments, agencies, joint ventures or other organisations, within a single jurisdiction or across multiple jurisdictions.
Addressees the parties to whom the auditor addresses the comfort letter, and includes the requesting parties and the responsible party of the entity.
Analytical procedures  evaluations of financial information through analysis of plausible relationships among both financial and non financial data. Analytical procedures also encompass such investigation as is necessary of identified fluctuations or relationships that are inconsistent with other relevant information or that differ from expected values by a significant amount.
Annual report  a document, or combination of documents, prepared typically on an annual basis by management or those charged with governance in accordance with law, regulation or custom, the purpose of which is to provide owners (or similar stakeholders) with information on the entity’s operations and the entity’s financial results and financial position as set out in the financial report. An annual report contains or accompanies the financial report and the auditor’s report thereon and usually includes information about the entity’s developments, its future outlook and risks and uncertainties, a statement by the entity’s governing body, and reports covering governance matters.
Anomaly  a misstatement or deviation that is demonstrably not representative of misstatements or deviations in a population.
Anomaly (in the context of ASAE 3150) a deviation in a sample that is demonstrably not representative of deviations in a population.
Applicable criteria (in the context of ASAE 3410) the criteria used by the entity to quantify and report its emissions in the Greenhouse Gas (GHG) statement.
Applicable criteria (in the context of ASAE 3420)  the criteria used by the responsible party when compiling the pro forma financial information. Criteria may be established by applicable law or regulation or in the absence of established criteria, be developed by the responsible party.
Applicable criteria (in the context of ASAE 3610)  the specific criteria used by the responsible party in preparing and presenting the general purpose water accounting report.
Applicable financial reporting framework 

the financial reporting framework adopted by management and, where appropriate, those charged with governance in the preparation of the financial report that is acceptable in view of the nature of the entity and the objective of the financial report, or that is required by law or regulation.

The term fair presentation framework means a financial reporting framework that requires compliance with the requirements of the framework and:

(a) Acknowledges explicitly or implicitly that, to achieve fair presentation of the financial report, it may be necessary for management to provide disclosures beyond those specifically required by the framework; or

(b) Acknowledges explicitly that it may be necessary for management to depart from a requirement of the framework to achieve fair presentation of the financial report. Such departures are expected to be necessary only in extremely rare circumstances.

The term compliance framework means a financial reporting framework that requires compliance with the requirements of the framework, but does not contain the acknowledgements in (a) or (b) above.

Applicable financial reporting framework (in the context of ASA 600) the financial reporting framework that applies to the group financial report.
Applicable financial reporting framework (in the context of ASRE 2410)  a financial reporting framework that is designed to achieve fair presentation.
Applicable financial reporting framework (in the context of ASRS 4450)  the financial reporting framework adopted by the entity in the preparation of general or special purpose financial information of the entity that is acceptable based on the nature of the entity or as required by applicable law or regulation. In Australia, an applicable financial reporting framework that may be used in preparing such financial information is represented by the Australian Accounting Standards which are International Financial Reporting Standards (IFRS) compliant (as issued by the International Accounting Standards Board), or applicable law, such as the Corporations Act 2001. Other frameworks that may be used are the International Financial Reporting Standards, issued by the International Accounting Standards Board and the Generally Accepted Accounting Principles of the United States.
Application controls in information technology  manual or automated procedures that typically operate at a business process level. Application controls can be preventative or detective in nature and are designed to ensure the integrity of the accounting records. Accordingly, application controls relate to procedures used to initiate, record, process and report transactions or other financial data.
Applied criteria (in the context of ASA 810)  the criteria applied by management in the preparation of the summary financial statements.
Appropriateness (of audit evidence)  the measure of the quality of audit evidence; that is, its relevance and its reliability in providing support for the conclusions on which the auditor’s opinion is based.
Arm’s length transaction  a transaction conducted on such terms and conditions as between a willing buyer and a willing seller who are unrelated and are acting independently of each other and pursuing their own best interests.
Assertions  representations by management and those charged with governance, explicit or otherwise, that are embodied in the financial report, as used by the auditor to consider the different types of potential misstatements that may occur.
Assertions (in the context of ASAE 3410)  representations by the entity, explicit or otherwise, that are embodied in the GHG statement, as used by the practitioner to consider the different types of potential misstatements that may occur.
Assertions (in the context of ASAE 3610)  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.
Assess  to analyse identified risks to conclude on their significance. “Assess,” by convention, is used only in relation to risk. (also see Evaluate)
Association  (see Auditor association with financial information)
Assumptions  expectations made by the responsible party as to future events and actions expected to take place as at the date the prospective financial information is prepared and exclude hypothetical assumptions, unless otherwise stated.
Assurance  (see Limited assurance and Reasonable assurance)
Assurance engagement  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. (see Reasonable assurance engagement and Limited assurance engagement).
Assurance engagement 

means an engagement in which a 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 on 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.

b. 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.

(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 addresses whether the subject matter information is free from material misstatement. 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.

Assurance engagement risk  the risk that the practitioner expresses an inappropriate conclusion when the subject matter information is materially misstated.
Practitioner  a professional accountant in public practice.
Assurance practitioner  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).
Assurance practitioner (in the context of ASA 220) a person or an organisation, whether in public practice, industry, commerce or the public sector, providing assurance services.
Assurance practitioner (in the context of ASAE 3000)  the individual, firm, or other organisation, whether in public practice, industry and commerce, or the public sector conducting an assurance engagement. Where this ASAE expressly intends that a requirement or responsibility be fulfilled by the lead assurance practitioner, the term the “lead assurance practitioner” rather than the “assurance practitioner” is used.
Assurance practitioner (in the context of ASAE 3500)  an the individual or firm or other organisation, whether in public practice, industry and commerce, or the public sector, providing assurance services including performance engagements. Where this ASAE expressly intends that a requirement or responsibility be fulfilled by the lead assurance practitioner, the term the “lead assurance practitioner” rather than “assurance practitioner” is used.
Assurance practitioner (in the context of ASAE 3610)  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.
Assurance practitioner (in the context of ASRE 2400)  a person or an organisation, whether in public practice, industry, commerce or the public sector, providing assurance services. The term includes the engagement partner or other members of the engagement team, or, as applicable, the firm. Where this ASRE expressly intends that a requirement or responsibility be fulfilled by the engagement partner, the term “engagement partner” rather than “assurance practitioner” is used. “Engagement partner” and “firm” are to be read as referring to their public sector equivalents where relevant.
Assurance practitioner (in the context of ASRS 4400)  a person or an organisation, whether in public practice, industry, commerce or the public sector, involved in the provision of assurance services.
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 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 firm), or an assurance practitioner’s external expert.
Assurance report  a written report prepared by an independent assurance practitioner that provides assurance on a single type of financial information (individual assurance report) or on multiple types of financial information (either a composite assurance report or separate assurance reports for each type of financial information). When prepared in connection with a fundraising it is often referred to as an “Independent Assurance Report” or “Investigating Accountant’s Report”.
Assurance skills and techniques  those planning, evidence gathering, evidence evaluation, 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.
Attestation engagement  an assurance engagement in which a party other than the assurance practitioner measures or evaluates the underlying subject matter against the criteria. The outcome of that measurement or evaluation is often presented in a report or statement. 
Attestation engagement on compliance 

a reasonable or limited assurance engagement in which a party other than the assurance practitioner, being the responsible party or evaluator evaluates compliance with the compliance requirements. The outcome of that evaluation is provided in a Statement, which may either be available to the intended users or may be presented by the assurance practitioner in the assurance report. In an attestation engagement on compliance, the assurance practitioner’s conclusion addresses whether the Statement is free from material misstatement. The assurance practitioner’s conclusion may be phrased in terms of:

(i) The compliance outcome and the criteria; or 
(ii) A Statement made by the appropriate party. 

Attestation engagement on controls 

a reasonable or limited assurance engagement in which a party other than the assurance practitioner, being the responsible party or evaluator, evaluates the design against the control objectives, and, if included in the scope of the engagement, the description, implementation or operating effectiveness of controls, against the design. The outcome of that evaluation is provided in a Statement, which may either be available to the intended users or may be presented by the assurance practitioner in the assurance report. The assurance practitioner’s conclusion may be phrased in terms of: 

(i) the design, and/or description, implementation or operating effectiveness of controls and the control objectives; or
(ii) the Statement of the responsible party or evaluator.

AUASB Standards 

standards issued by the AUASB, comprising:

(a) Australian Auditing Standards which means the suite of auditing standards issued by the AUASB, comprising:

  • Auditing Standards made under section 336 of the Corporations Act 2001;
  • ASA 805 Special Considerations-Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; and
  • ASA 810 Engagements to Report on Summary Financial Statements.
(b) Standards on Review Engagements;
(c) Standards on Assurance Engagements; and
(d) Standards on Related Services.

 

Audit documentation  the record of audit procedures performed, relevant audit evidence obtained, and conclusions the auditor reached (terms such as “working papers” or “workpapers” are also sometimes used).
Audit engagement  (see Reasonable assurance engagement)
Audit evidence 

information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based. Audit evidence includes both information contained in the accounting records underlying the financial report and other information. For purposes of the Australian Auditing Standards: 

(i) Sufficiency of audit evidence is the measure of the quantity of audit evidence. The quantity of the audit evidence needed is affected by the auditor’s assessment of the risks of material misstatement and also by the quality of such audit evidence. 
(ii) Appropriateness of audit evidence is the measure of the quality of audit evidence; that is, its relevance and its reliability in providing support for the conclusions on which the auditor’s opinion is based.

Audit evidence (in the context of ASA 500)  information used by the auditor in arriving at the conclusions on which the auditor’s opinion is based. Audit evidence includes both information contained in the accounting records underlying the financial report and information obtained from other sources.
Audit file  one or more folders or other storage media, in physical or electronic form, containing the records that comprise the audit documentation for a specific engagement.
Audit firm  (see Firm)
Audit Opinion  (see Modified opinion and Unmodified opinion)
Audit risk  the risk that the auditor expresses an inappropriate audit opinion when the financial report is materially misstated. Audit risk is a function of the risks of material misstatement and detection risk.
Audit sampling (sampling the application of audit procedures to less than 100% of items within a population of audit relevance such that all sampling units have a chance of selection in order to provide the auditor with a reasonable basis on which to draw conclusions about the entire population.
Audited financial report  a financial report audited by the auditor in accordance with Australian Auditing Standards, and from which the summary financial statements are derived.
Auditing Standards 

auditing standards made under section 336 of the Corporations Act 2001(the “Act”), and include:

(a) ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements; and

(b) ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity

(see Australian Auditing Standards)

Auditor  the person or persons conducting the audit, usually the engagement partner or other members of the engagement team, or, as applicable, the firm. Where an Auditing Standard expressly intends that a requirement or responsibility be fulfilled by the engagement partner, the term “engagement partner” rather than “auditor” is used. “Engagement partner” and “firm” are to be read as referring to their public sector equivalents where relevant.
Auditor (in the context of ASRE 2415) 

a registered company auditor or an individual:

(a) taken to be a registered company auditor under section 324BE of the Act; and/or

(b) permitted under the ACNC Act to conduct reviews of a financial report; and/or 

(c) permitted to conduct reviews of a financial report under other applicable legislation or regulation.

Auditor (in the context of ASRS 4450)  the person or firm appointed to audit an entity’s financial report. 
Auditor association with financial information  an auditor is associated with financial information when the auditor attaches a report to that information or consents to the use of the auditor’s name in a professional connection.
Auditor’s expert  an individual or organisation possessing expertise in a field other than accounting or auditing, whose work in that field is used by the auditor to assist the auditor in obtaining sufficient appropriate audit evidence. An auditor’s expert may be either an auditor’s internal expert (who is a partner or staff, including temporary staff, of the auditor’s firm or a network firm), or an auditor’s external expert. “Partner” and “firm” should be read as referring to their public sector equivalents where relevant.
Auditor’s point estimate or auditor’s range  the amount, or range of amounts, respectively, derived from audit evidence for use in evaluating management’s point estimate.
Auditor’s statement  a statement made by the auditor that based on the procedures performed, nothing has come to the auditor’s attention that caused the auditor to believe that specified matters do not meet specified criteria.
Australian Accounting Standards  the Australian Accounting Standards issued by the Australian Accounting Standards Board.
Australian Auditing Standards 

the suite of auditing standards issued by the AUASB, comprising:

 

  • Auditing Standards made under section 336 of the Corporations Act 2001;
  • ASA 805 Special Considerations—Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement; and
  • ASA 810 Engagements to Report on Summary Financial Statements.
(see Auditing Standards)
Australian Water Accounting Standards  water accounting standards issued by the Bureau of Meteorology in accordance with its functions under the Commonwealth Water Act 2007.