Coronavirus (COVID-19) updates from the Australian Government

Office of the Auditing and Assurance Standards Board

Date

Section 1: Agency overview and resources

1.1 Strategic direction statement

The Office of the Auditing and Assurance Standards Board (AUASB) is an Australian Government agency under the Australian Securities and Investments Commission Act 2001.

The functions of the AUASB are to:

  • make auditing standards under section 336 of the Corporations Act 2001 for the purposes of the corporations legislation;
  • formulate auditing and assurance standards for other purposes;
  • formulate guidance on auditing and assurance matters;
  • participate in and contribute to the development of a single set of auditing standards for world‑wide use; and
  • advance and promote the main objectives of part 12 of the Australian Securities and Investments Commission Act 2001.

The vision of the AUASB is to be recognised as a leading national auditing and assurance standards setting body that develops high quality auditing and assurance standards and guidance in the public interest.

The mission of the AUASB is to develop, in the public interest, high quality auditing and assurance standards and related guidance as a means to enhance the relevance, reliability and timeliness of information provided to users of audit and assurance services.

Key strategies during 2013‑14 include to:

  • develop auditing and assurance standards and guidance;
  • identify emerging auditing and assurance issues;
  • contribute to and influence the development of international auditing standards; and
  • promote awareness and understanding of the AUASB role and work program, auditor responsibilities, and the role of auditing and assurance services.

1.2 Agency resource statement

Table 1.1 shows the total resources for the AUASB.

Table 1.1: Office of the Auditing and Assurance Standards Board resource statement — Budget estimates for 2013‑14 as at Budget May 2013
Estimate
of prior
year amounts
available in
2013‑14
$'000
+ Proposed
at Budget
2013‑14
$'000
= Total
estimate
2013‑14
$'000
Actual
available
appropriation
2012‑13
$'000
Ordinary annual services              
Departmental              
Prior year departmental appropriation   931 4 -   931 -
Departmental appropriation3   -   2,244 1 2,244 2,239
Receipts from other sources (s31)   -   33 2 33 32
Total ordinary annual services A 931   2,277   3,208 2,271
Other services              
Departmental non-operating              
Equity injections   579 4 -   579 -
Total other services B 579   -   579 -
Total net resourcing for AUASB (A+B)   1,510   2,277   3,787 2,271

1. Appropriation Bill (No. 1) 2013‑14.

2. Receipts received under section 31 (s31) of the Financial Management and Accountability Act 1997.

3. Includes $0.04 million in 2013‑14 for the departmental capital budget (also refer to Table 3.2.5).

4. Estimated adjusted balance carried from previous year for annual appropriations.

1.3 Budget measures

Budget measures relating to the AUASB are summarised below.

Table 1.2: Australian Bureau of Statistics 2013‑14 Budget measures
Program 2012‑13
$'000
2013‑14
$'000
2014‑15
$'000
2015‑16
$'000
2016‑17
$'000
Expense measures            
Targeted savings — public service efficiencies1 1.1 (10) (14) (12) (11) (10)
Total expense measures   (10) (14) (12) (11) (10)

1 This measure was included as a cross portfolio measure in the Mid‑Year Economic and Fiscal Outlook 2012‑13.

Prepared on a Government Finance Statistics (fiscal) basis.

Section 2: Outcomes and planned performance

2.1 Outcomes and performance information

Government outcomes are the intended results, impacts or consequences of actions by the Government on the Australian community. Commonwealth programs are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programs which contribute to Government outcomes over the Budget and forward years.

The AUASB's outcome is described below,
specifying the strategy, program objective, program deliverables and program key performance indicators used to assess and monitor the performance of the AUASB.

Outcome 1: The formulation and making of auditing and assurance standards that are used by auditors of Australian entity financial reports or for other auditing and assurance engagements

Outcome 1 strategy

The key strategies to achieve Outcome 1 are:

  • making auditing standards under section 336 of the Corporations Act 2001 and related guidance for use by Australian auditors who are undertaking audit engagements for the purposes of the Corporations legislation, including facilitating and monitoring the implementation of the Australian Auditing Standards;
  • formulating auditing and assurance standards and related guidance for use by Australian auditors who are undertaking auditing or assurance;
  • engagements for purposes other than the purposes of the Corporations legislation; and
  • providing Australian participation in, and contributing to, the development of a single set of auditing standards for world‑wide use. In this regard the AUASB will continue to participate in key International Auditing and Assurance Standards Board (IAASB) projects on auditor reporting, audit quality, International Standards on Auditing implementation monitoring and review engagements.

Outcome expense statement

Table 2.1 provides an overview of the total expenses for Outcome 1.

Table 2.1: Budgeted Expenses for Outcome 1
Outcome 1: The formulation and making of auditing and assurance standards that are used by auditors of Australian entityfinancial reports or for other auditing and assurance engagements 2012‑13
Estimated
actual
expenses
$'000
2013 ‑14
Estimated
expenses
$'000
Program 1.1: Auditing and Assurance Standards Board    
Departmental expenses    
Departmental appropriation 2,234 2,241
Expenses not requiring appropriation in the budget year 103 120
Total expenses for Outcome 1 2,337 2,361
     
  2012‑13 2013‑14
 Average staffing level (number) 8 8

Contributions to Outcome 1

Program 1.1: Auditing and Assurance Standards Board
Program objective

Formulate and maintain Auditing Standards that are legally enforceable under the Corporations Act 2001 and contribute to the development of international auditing standards.

Contribute to the ongoing implementation of Australian Auditing Standards, including:

  • monitoring the implementation of Australian Auditing Standards and providing periodic and formal feedback to the IAASB, which has established a project monitoring task force for this purpose;
  • monitoring the revision of IAASB International Standards on Auditing and considering the implications for the following equivalent AUASB standards:
    • Auditor Reporting; and
    • Standard on review engagements.
  • developing articles that will highlight key principles in auditing standards; and
  • presenting at various public forums, conferences and information sessions.

Formulate and maintain other auditing and assurance standards, ensuring quality and complete coverage of relevant auditing and assurance topics including:

  • standards on review engagements;
  • assurance engagements other than on historical financial statements;
  • assurance on water accounting reports;
  • assurance on internal control; and
  • assurance on compliance and performance engagements.

Formulate and maintain guidance pronouncements, ensuring that guidance is high quality, timely and provides appropriate coverage through pronouncements that supplement standards and address emerging issues including:

  • auditing under National Greenhouse and Energy Reporting and Clean Energy schemes;
  • the Australian Prudential Regulation Authority including superannuation, general insurance, approved deposit taking institutions and life insurance companies;
  • the Australian Securities and Investments Commission regulated areas, including managed investment schemes;
  • auditing self‑managed superannuation funds;
  • privity letter requests; and
  • auditing grant acquittals.

Influence the development of international and national standards by liaising with the IAASB and other national standard‑setting organisations to contribute to improving the quality of global auditing and assurance standards. This includes working with the New Zealand Auditing and Assurance Standards Board to harmonise Australian and New Zealand auditing standards and undertake joint projects where possible, consistent with the Outcome Proposals agreed in August 2009 by the Australian and New Zealand Prime Ministers.

Through research, communication and consultations to identify and respond to emerging issues on a timely basis, including participating in the early stages of the development of legislation and regulation to better define audit requirements, including:

  • development of AUASB Bulletins on various current topics relating to the Board's areas of interest, including the value of using the AUASB auditing framework;
  • updating the Audit Committees Guide; and
  • promoting thought leadership on the importance of achieving and heightening audit quality.

Through a detailed communication and consultation plan, the AUASB strategy is to increase awareness of the AUASB's work among its stakeholders, and to ensure that stakeholders' views are appropriately considered in the AUASB activities and initiatives.

Program expenses

There are no significant changes to estimates across the forward years.

Table 2.2: Program expenses
2012‑13
Revised
budget
$'000
2013‑14
Budget
$'000
2014‑15
Forward
year 1
$'000
2015‑16
Forward
year 2
$'000
2016‑17
Forward
year 3
$'000
Annual departmental expenses          
Departmental items 2,337 2,361 2,380 2,391 2,372
Total departmental expenses 2,337 2,361 2,380 2,391 2,372
Program deliverables

The AUASB has the following deliverables:

  • prepare and issue auditing standards under section 336 of the Corporations Act 2001;
  • pre
    pare and issue new and revised assurance standards, standards on review engagements and related guidance; and
  • contribute to the development of international auditing and assurance standards.
Program key performance indicators

The AUASB has the following key performance indicators:

  • issued auditing standards are high quality, developed on a timely basis, are consistent with those developed by the IAASB and are based on the corresponding versions of International Standards on Auditing;
  • issued assurance standards and standards on review engagements are high quality and developed on a timely basis;
  • relevant guidance is issued to auditors, assurance practitioners and other users, as appropriate, on a timely basis;
  • emerging auditing and assurance issues are identified and addressed on a timely basis;
  • responses are made to all significant IAASB exposure drafts; and
  • appropriate input is provided to the IAASB.

Section 3: Explanatory tables and budgeted financial statements

Section 3 presents explanatory tables and budgeted financial statements which provide a comprehensive snapshot of the agency finances for the budget year 2013‑14. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations, program expenses, and special accounts.

3.1 Explanatory tables

3.1.1 Movement of administered funds between years

The AUASB does not have any administered funds.

3.1.2 Special accounts

The AUASB does not have any special accounts.

3.1.3 Australian Government Indigenous Expenditure

The AUASB does not have any Australian Government Indigenous Expenditure.

3.2 Budgeted financial statements

3.2.1 Differences in agency resourcing and financial statements

There are no material differences between agency resourcing and financial statements.

3.2.2 Analysis of budgeted financial statements

The budgeted financial statements have been prepared on an Australian Accounting Standards basis.

The AUASB is budgeting for a break‑even operating result for 2013‑14 after adding back non‑appropriated depreciation and amortisation expenses.

3.2.3 Budgeted financial statements tables

Table 3.2.1: Comprehensive income statement (Showing Net Cost of Services)
(for the period ended 30 June)
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
EXPENSES          
Employee benefits 1,542 1,541 1,591 1,645 1,701
Supplier expenses 713 721 688 655 623
Depreciation and amortisation 79 96 98 88 45
Finance costs 3 3 3 3 3
Total expenses 2,337 2,361 2,380 2,391 2,372
LESS:          
OWN-SOURCE INCOME          
Revenue          
Sale of goods and rendering of services 32 33 35 36 37
Total revenue 32 33 35 36 37
Gains          
Other 24 24 24 24 24
Total gains 24 24 24 24 24
Total own-source income 56 57 59 60 61
Net cost of (contribution by) services 2,281 2,304 2,321 2,331 2,311
Appropriation revenue 2,202 2,208 2,223 2,243 2,266
Surplus (deficit) attributable to the Australian Government (79) (96) (98) (88) (45)
Note: Impact of Net Cash Appropriation Arrangements 
  2012-13
$'000
2013-14
$'000
2014-15
$'000
2015-16
$'000
20116-17
$'000
Total Comprehensive Income (loss) less depreciation/amortisation expenses previously funded through revenue appropriations - - - - -
plus depreciation/amortisation expenses previously funded through revenue appropriations (79) (96) (98) (88) (45)
Total Comprehensive Income (loss) - as per the Statement of Comprehensive Income (79) (96) (98) (88) (45)

Prepared on Australian Accounting Standards basis.

Table 3.2.2: Budgeted departmental balance sheet
(as at 30 June)
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
ASSETS          
Financial assets          
Cash and equivalents 200 200 200 200 200
Trade and other receivables 1,265 1,235 1,206 1,168 1,185
Total financial assets 1,465 1,435 1,406 1,368 1,385
Non-financial assets          
Infrastructure, plant and equipment 208 148 82 24 33
Intangibles 8 12 10 12 5
Other 5 5 5 5 5
Total non-financial assets 221 165 97 41 43
Total assets 1,686 1,600 1,503 1,409 1,428
LIABILITIES          
Provisions          
Employees 563 594 625 657 690
Other 85 88 90 93 96
Total provisions 648 682 715 750 786
Payables          
Suppliers 50 51 50 49 45
Other 244 183 115 37 31
Total payables 294 234 165 86 76
Total liabilities 942 916 880 836 862
Net assets 744 684 623 573 566
EQUITY          
Contributed equity 595 499 401 313 268
Asset Revaluation Reserve 22 22 22 22 22
Retained surpluses or accumulated deficits 127 163 200 238 276
Total equity 744 684 623 573 566
Current assets 1,470 1,440 1,411 1,373 1,390
Non-current assets 216 160 92 36 38
Current liabilities 340 372 402 432 462
Non-current liabilities 602 544 478 404 400

Prepared on Australian Accounting Standards basis.

Table 3.2.3: Budgeted departmental statement of cash flows
(for the period ended 30 June)
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
OPERATING ACTIVITIES          
Cash received          
Goods and services          
Appropriations 2,254 2,211 2,217 2,236 2,275
Other 80 61 70 78 37
Total cash received 2,334 2,272 2,287 2,314 2,312
Cash used          
Employees 1,512 1,512 1,560 1,613 1,668
Suppliers 743 757 733 708 606
Other - - - - 29
Total cash used 2,255 2,269 2,293 2,321 2,303
Net cash from (used by) operating activities 79 3 (6) (7) 9
INVESTING ACTIVITIES          
Cash used          
Purchase of property, plant and equipment 89 39 31 31 47
Total cash used 89 39 31 31 47
Net cash from (used by) investing activities (89) (39) (31) (31) (47)
FINANCING ACTIVITIES          
Cash received          
Contributed equity 37 36 37 38 38
Total cash received 37 36 37 38 38
Net cash from (used by) financing activities 37 36 37 38 38
Net increase (decrease) in cash held 27 - - - -
Cash at the beginning of the reporting period 173 200 200 200 200
Cash at the end of the reporting period 200 200 200 200 200

Prepared on Australian Accounting Standards basis.

Table 3.2.4: Departmental statement of changes in equity — summary of movement (Budget year 2013‑14)
Retained
surpluses
$'000
Asset
revaluation
reserve
$'000
Other
reserves
$'000
Contributed
equity/
capital
$'000
Total
equity
$'000
Opening balance as at 1 July 2013          
Balance carried forward from previous period 595 22 - 127 744
Adjusted opening balance 595 22 - 127 744
Comprehensive income          
Surplus (deficit) for the period (96) - - - (96)
Total comprehensive income recognised directly in equity (96) - - - (96)
Transactions with owners          
Contributions by owners          
Appropriation (departmental capital budget) - - - 36 36
Total transactions with owners - - - 36 36
Estimated closing balance as at 30 June 2014 499 22 - 163 684

Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget (DCB) statement
Estimated
actual
2012‑13
$'000
Budget
estimate
2013‑14
$'000
Forward
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
NEW CAPITAL APPROPRIATIONS          
Capital budget - Bill 1 - DCB 37 36 37 38 38
Total new capital appropriations 37 36 37 38 38
Provided for:          
Purchase of non-financial assets 37 36 37 38 38
Total Items 37 36 37 38 38
PURCHASE OF NON-FINANCIAL ASSETS          
Funded by capital appropriation - DCB 89 39 31 31 47
TOTAL 89 39 31 31 47
RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE          
Total purchases 89 39 31 31 47
Total cash used to acquire assets 89 39 31 31 47

Prepared on Australian Accounting Standards basis.

Table 3.2.6: Statement of asset movements — departmental
Buildings
$'000
Other
infrastructure,
plant and
equipment
$'000
Intangibles
$'000
L&B, IP&E
held for
sale
$'000
Total
$'000
As at 1 July 2013          
Gross book value - 589 50 - 639
Accumulated depreciation/amortisation and impairment - 380 42 - 422
Opening net book balance - 209 8 - 217
Capital asset additions          
By purchase - appropriation ordinary annual services - 25 14 - 39
Total additions - 25 14 - 39
Other movements          
Depreciation/amortisation expense - 86 10 - 96
Total other movements - 86 10 - 96
As at 30 June 2014          
Gross book value - 614 64 - 678
Accumulated depreciation/amortisation and impairment - 466 52 - 518
Closing net book balance - 148 12 - 160

Prepared on Australian Accounting Standards basis.