Controls assurance standard effective 1 January

The new standard on assurance engagements ASAE 3150 ‘Assurance Engagements on Controls’ is operative for assurance engagements commencing on or after 1 January. It is expected that the audit approach to assurance engagements on internal control will require reconfirmation with governance and management.

ASAE 3150 gives requirements, their application and other explanatory material for the acceptance, planning, conduct and reporting of 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.

The ASAE 3150 replaces existing standard AUS 810 ‘Special Purpose Reports on the Effectiveness of Control Procedures’, last revised in 2002.

The requirements and application material ASAE 3150 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 the evaluation.

ASAE 3150 requires the assurance practitioner to draw conclusions on the suitability of the design of controls to achieve identified control objectives for every engagement. 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.

< Back