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9 Jan. 2015

AUASB Issues Standard on Controls Assurance

A new key standard on controls assurance has been issued by the AUASB, following approval in late December 2014.  The new Standard on Assurance Engagements ASAE 3150 Assurance Engagements on Controls is operative for assurance engagements commencing on or after 1 January 2016, with early adoption permitted*.   The proposed standard replaces the existing standard, AUS 810 Special Purpose Reports on the Effectiveness of Control Procedures, last revised by the former AuASB in 2002.

ASAE 3150 was developed in Australia and the standard has no international equivalent.  ASAE 3150 provides requirements and application and other explanatory material for the acceptance, planning, conduct and reporting for assurance engagements on controls, other than those to which ASAE 3402 is applicable.  ASAE 3402 applies to assurance engagements on controls at a service organisation that are likely to be relevant to user entities’ internal control as it relates to financial reporting.

ASAE 3150 has been written in the clarity format, which is consistent with other current AUASB standards.  The requirements and application material it provides are additional to those contained in ASAE 3000 Engagements Other than Audits or Reviews of Historical Financial Information.  ASAE 3150 is therefore required to be applied in conjunction with ASAE 3000.  ASAE 3150 applies to both reasonable and limited assurance engagements, as well as both direct engagements, where the assurance practitioner evaluates the controls, and attestation engagements, where the responsible party, usually on behalf of the entity, evaluates the controls and makes a Statement on the outcome of that evaluation.

ASAE 3150 requires the assurance practitioner to conclude on the suitability of the design of controls to achieve identified control objectives for every engagement and, in addition, the assurance practitioner may be engaged to conclude either:

• At a specified date, on the fair presentation of the description of the system and/or implementation of controls as designed; or

• Throughout the period, on the fair presentation of the description of the system and/or operating effectiveness of controls as designed.

The new assurance standard provides example engagement letters, representation letters and assurance reports, as well as an example responsible party’s Statement on controls and an example system description.

The issuance of ASAE 3150 is the culmination of an extensive project which drew on the expertise of a project advisory group, with input from the NZAuASB and assurance practitioners from both Australia and New Zealand.  Consultation with stakeholders was conducted through a 60 day exposure period, during which time a roundtable discussion was held with key interested parties.  Nine comment letters were received on the exposure draft which were considered by the AUASB and addressed, as appropriate, in amendments reflected in the final standard.

*Early adoption is permitted only in conjunction with the adoption of revised ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information, issued in June 2014.