Feedback invited: Revised ASAE 3500 Performance Engagements

Wednesday, May 29, 2024

The AUASB has released an Exposure Draft of a Proposed Revised Standard on Assurance Engagements ASAE 3500 Performance Engagements (ED 01/24) that proposes narrow scope amendments to the existing standard, for a 60-day public comment period. The Explanatory Memorandum that accompanies ED 01/24 provides further background to, and an explanation of, ED 01/24. Stakeholders are encouraged to comment on all or some of the questions contained in the Explanatory Memorandum.

ASAE 3500 deals with direct engagements in which an assurance practitioner evaluates a responsible party’s performance of an activity against identified criteria. Performance engagements generally focus on one or more of the principles of economy, efficiency, effectiveness, and/or ethics. The Standard is used primarily by State, Territory or Commonwealth Auditors-General for conducting performance engagements in the public sector; however, may also be used in the private sector.

The AUASB has undertaken a narrow in scope revision of ASAE 3500 to address the key findings from the AUASB’s Post Implementation Review of the Standard undertaken in 2023.

The substantive changes to the extant Standard are summarised in Appendix 1 of the Explanatory Memorandum and include:

Expanding the scope of the Standard to include requirements and application material for limited assurance engagements.
Revising the reporting requirements to be clearer and providing additional application material to promote consistent application in practice.
Using the term ‘significance’ in the context of performance engagements to replace the term ‘materiality’, updating relevant requirements and tailoring application material to assist with application of the concept in practice.

The AUASB invites stakeholders to comment on all or some of the questions contained in the Explanatory Memorandum by 30 July 2024 via the AUASB website.

Any queries about the Exposure Draft should be directed to Johanna Foyster, Senior Manager, at [email protected].