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Definitions P

Partner to Purchased offset

Term

Definition

Partner 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.
Partner (in the context of ASA 220)  any individual with authority to bind the firm with respect to the performance of an audit of a financial report or historical financial information. Partner should be read as referring to a public sector equivalent where relevant.
Performance engagement  an assurance engagement to conclude on the performance (expressed as either economy, efficiency and/or effectiveness) of all or a part of the activity or activities of an entity or across multiple entities as evaluated by identified criteria, commonly referred to as a performance audit.
Performance materiality  the amount or amounts set by the auditor at less than materiality for the financial report as a whole to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial report as a whole. If applicable, performance materiality also refers to the amount or amounts set by the auditor at less than the materiality level or levels for particular classes of transactions, account balances or disclosures.
Performance materiality (in the context of ASAE 3410)  the amount or amounts set by the assurance practitioner at less than materiality for the GHG statement to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the GHG statement. If applicable, performance materiality also refers to the amount or amounts set by the assurance practitioner at less than the materiality level or levels for particular types of emissions or disclosures.
Performance materiality (in the context of ASAE 3610)  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.
Personnel  partners and staff.
Pervasive (in the context of ASA 705) 

a term used, in the context of misstatements, to describe the effects on the financial report of misstatements or the possible effects on the financial report of misstatements, if any, that are undetected due to an inability to obtain sufficient appropriate audit evidence. Pervasive effects on the financial report are those that, in the auditor’s judgement:

(i) Are not confined to specific elements, accounts or items of the financial report;

(ii) If so confined, represent or could represent a substantial proportion of the financial report; or

(iii) In relation to disclosures, are fundamental to users’ understanding of the financial report.

Pervasive (in the context of ASAE 3150) 

the effect or possible effect on the system of controls of, identified or undetected, deficiencies in the design of controls, misstatements in the description, deficiencies in implementation as designed or deviations in operating effectiveness as designed. Pervasive effects on the controls system are those that, in the assurance practitioner’s judgement: 

(i) Are not confined to certain overall or specific control objectives, areas of activity, components of controls or controls; or 

(ii) If so confined, represent or could represent a substantial proportion of the system of controls included in the scope of the engagement. 

Population  the entire set of data from which a sample is selected and about which the auditor wishes to draw conclusions.
Population (in the context of ASAE 3150)  the entire set of instances of a particular control from which a sample is selected and about which the assurance practitioner wishes to draw conclusions. 
Positive confirmation request  a request that the confirming party respond directly to the auditor indicating whether the confirming party agrees or disagrees with the information in the request, or providing the requested information.
Preconditions for an audit  the use by management of an acceptable financial reporting framework in the preparation of the financial report and the agreement of management and, where appropriate, those charged with governance to the premise on which an audit is conducted.
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.
Predecessor auditor  the auditor from a different audit firm, who audited the financial report of an entity in the prior period and who has been replaced by the current auditor.
Premise (relating to the responsibilities of management and, where appropriate, those charged with governance, on which an audit is conducted)

management and, where appropriate, those charged with governance have acknowledged and understand that they have the following responsibilities that are fundamental to the conduct of an audit in accordance with Australian Auditing Standards. That is, responsibility:

(i) For the preparation of the financial report in accordance with the applicable financial reporting framework; including where relevant, their fair presentation;

(ii) For such internal control as management and, where appropriate, those charged with governance determine is necessary to enable the preparation of a financial report that is free from material misstatement, whether due to fraud or error, and

(iii) To provide the auditor with:

(a) Access to all information, of which management and, where appropriate, those charged with governance are aware that is relevant to the preparation of the financial report such as records, documentation and other matters;

(b) Additional information that the auditor may request from management and, where appropriate, those charged with governance, for the purposes of the audit; and

(c) Unrestricted access to persons within the entity from whom the auditor determines it necessary to obtain audit evidence.

In the case of a fair presentation framework, (a) above may be restated as “for the preparation and fair presentation of the financial report in accordance with the financial reporting framework”, or “for the preparation of the financial report that gives a true and fair view in accordance with the financial reporting framework”.
The “premise, relating to the responsibilities of management and, where appropriate, those charged with governance, on which an audit is conducted” may also be referred to as the “premise.”
Private placement  securities offered for sale or issue in a prospectus to a limited number of investors, which are exempt, by law or regulation from certain content, distribution or registration requests in certain jurisdictions (“exempt offering”).
Pro forma adjustments (in the context of ASAE 3420) 

in relation to unadjusted financial information:

(i). Adjustments to unadjusted financial information that illustrate the impact of a significant event(s) or transaction(s) (“events” or “transactions”) as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration; and 

(ii). Adjustments to unadjusted financial information that are necessary for the pro forma financial information to be compiled on a basis consistent with the applicable financial reporting framework of the reporting entity (“entity”) and its accounting policies under that framework. 

Pro forma adjustments include the relevant financial information of a business that has been, or is to be, acquired (“acquiree”), or a business that has been, or is to be, divested (“divestee”), to the extent that such information is used in compiling the pro forma financial information (“acquiree or divestee financial information”).
Pro forma adjustments (in the context of ASAE 3450) 

adjustments selected by the responsible party in accordance with the stated basis of preparation to make to base financial information (historical or prospective) to:

(i) illustrate the impact of a significant event or transaction (“event” or “transaction‖”) as if the event had occurred or the transaction had been undertaken at an earlier date than actually occurred, or as if it had not occurred at all; and/or

(ii) eliminate the effects of unusual or non-recurring event(s) or transaction(s) that are not part of the normal operations of the entity; and/or 

(iii) exclude certain event(s) or transaction(s), or present transactions or balances on a different recognition and measurement basis from that required or permitted by Australian Accounting Standards; and/or 

(iv) correct errors or uncertainties.

Pro forma financial information (in the context of ASAE 3420)  historical financial information shown together with adjustments to illustrate the impact of an event(s) or transaction(s) on unadjusted financial information as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. In this ASAE, it is assumed that pro forma financial information is presented in columnar format consisting of (a) the unadjusted historical financial information; (b) the pro forma adjustments; and (c) the resulting pro forma column.
Pro forma financial information (in the context of ASAE 3450)  base financial information adjusted for pro forma adjustments in accordance with the stated basis of preparation, resulting in non-IFRS financial information that is not prepared in accordance with Australian Accounting Standards. It is subject to the assumptions inherent in the responsible party’s stated basis of preparation. 
Pro forma financial information (in the context of ASRS 4450)  non-IFRS financial information that is intended to show the effects of proposed or completed transactions for illustrative purposes. The non-IFRS financial information is adjusted by pro forma adjustments to illustrate the impact of an event(s) or transaction(s) in the financial information as if the event had occurred, or the transaction had been undertaken at an earlier date selected for the purposes of the illustration, ordinarily the beginning of the reporting period.
Procedures  procedures performed by the auditor which are specified by the requesting parties. The auditor does not determine whether the extent of such procedures is sufficient for the purposes of the requesting parties. Procedures may also be referred to as agreed upon procedures.
Procedures of an assurance nature  procedures performed by an assurance practitioner which are the same or similar to procedures performed in an assurance engagement.
Professional accountant  an individual who is a member of an accounting professional body.
Professional accountant in public practice  a professional accountant, irrespective of functional classification (for example, audit, tax or consulting) in a firm that provides professional services. This term is also used to refer to a firm of professional accountants in public practice.
Professional judgement  the application of relevant training, knowledge and experience, within the context provided by auditing, accounting and ethical standards, in making informed decisions about the courses of action that are appropriate in the circumstances of the audit engagement.
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 engagement.
Professional judgement (in the context of ASAE 3610)  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.
Professional judgement (in the context of ASRE 2400) the application of relevant training, knowledge and experience, within the context provided by assurance accounting and ethical standards, in making informed decisions about the courses of action that are appropriate in the circumstances of the review engagement.
Professional scepticism  an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement due to error or fraud, and a critical assessment of audit evidence.
Professional scepticism (in the context of ASAE 3000 and ASAE 3610)  an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement and a critical assessment of evidence.
Professional scepticism (in the context of ASAE 3100)  an attitude that includes a questioning mind, being alert to conditions which may indicate possible misstatement or non-compliance, and a critical assessment of evidence.
Professional scepticism (in the context of ASAE 3500)  an attitude that includes a questioning mind, being alert to the validity of evidence obtained and to critically assess evidence that contradicts or brings into question the reliability of documents and responses to enquiries and other information obtained.
Professional standards  AUASB Engagement Standards, as defined in the AUASB’s Preface to the Australian Quality Control, Auditing, Review, Other Assurance, and Related Services Pronouncements, and relevant ethical requirements.
Prospective financial information 

financial information of a predictive character prepared based on assumptions made by the responsible party, in accordance with the stated basis of preparation. Prospective financial information may be either:

(i) a forecast which is prepared based on the responsible party’s assumptions as to future events expected to take place on the dates, or in the period, described and the actions expected to be taken at the date the financial information is prepared. It is commonly referred to as a “directors’ forecast”; or

(ii) a projection which is prepared based on the responsible party’s material hypothetical assumptions, or a mixture of assumptions and material hypothetical assumptions as to future events which are not necessarily expected to take place on the dates, or in the period, described and the actions not necessarily expected to be taken at the date the financial information is prepared (a “what if” scenario).

Prospectus  a document issued pursuant to applicable law or regulation relating to the entity’s securities on which it is intended that a third party should make an investment decision. 
Public document (in the context of ASAE 3420)  a disclosure document, product disclosure statement or other documentation provided to shareholders, unit holders, or holders of a relevant interest in an entity (or which is provided to management of any entity) in relation to a scheme of arrangement under the Part 5.1 of the Corporations Act 2001, or a takeover or compulsory acquisition under Chapter 6 of the Corporations Act 2001.
Public document (in the context of ASAE 3450) 

a disclosure document, product disclosure statement or other documentation provided to shareholders, unit holders, or holders of a relevant interest in an entity (or which is provided to management of an entity) in relation to a scheme of arrangement under Part 5.1 of the Corporations Act 2001, or a takeover or compulsory acquisition under Chapter 6 of the Corporations Act 2001. Examples include:

(i) A prospectus prepared by an entity that is a corporation in accordance with relevant sections of the Corporations Act 2001.

(ii) A Short Form Prospectus; lodged with the Australian Securities and Investments Commission (ASIC), instead of including in the body of the prospectus the relevant information discussed in such materials.

(iii) Scheme Booklets.

(iv) Target Statements.

(v) Bidder Statements.

(vi) Profile Statements; this is a brief statement that may be sent out with offers, with ASIC’s approval, instead of a prospectus.

(vii) Offer Information Statements; this is a document that may be used instead of a prospectus under certain criteria set by the Corporations Act 2001.

(viii) Product Disclosure Statements (PDS) used where the entity is a trust or other type of managed investment scheme.

Public sector  national governments, regional (for example, state, provincial, territorial) governments, local (for example, city, town) governments and related governmental entities (for example, agencies. boards, commissions and enterprises).
Published financial information financial information of the entity or of an acquiree or a divestee that is made available publicly. 
Purchased offset  an emissions deduction in which the entity pays for the lowering of another entity’s emissions (emissions reductions) or the increasing of another entity’s removals (removal enhancements), compared to a hypothetical baseline.