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The Auditor-General's Auditing Standards

Note: The Auditor-General's Auditing Standards are published every three years but are more regularly updated (the updates are summarised in our annual report). All appointed auditors should be logging in to The Auditors' Homepage to access the most recent version of any of the Auditor-General's Auditing Standards.

The Auditor-General's auditing standards have been updated (published 18 March 2014). Significant revisions are noted below:

Standard/statement File size
1 Introduction 164 kB
2 Glossary of terms 25 kB
3 AG PES 1 (Revised) Code of ethics for assurance practitioners

Major changes: AG PES 1 (Revised) - alignment of independence and ethics statements
200 kB
4 AG PES 3 Quality control
49 kB
5 AG-5 Performance audits, other auditing services and other work 119 kB
6 AG-6 Inquiries 109 kB
7 AG ISA (NZ) 200 Overall objectives of the independent auditor 48 kB
8 AG ISA (NZ) 210 The terms of audit engagements 60 kB
9 AG ISA (NZ) 240 Fraud 42 kB
10 AG ISA (NZ) 250 Consideration of laws and regulations 52 kB
11 AG ISA (NZ) 260 Communication with those charged with governance 22 kB
12 AG ISA (NZ) 300 Planning the annual audit 22 kB
13 AG ISA (NZ) 315 Understanding the entity and its environment 27 kB
14 AG ISA (NZ) 320 Materiality in planning and performing an annual audit 32 kB
15 AG ISA (NZ) 330 The auditor’s responses to assessed risks 21 kB
16 AG ISA (NZ) 450 Evaluation of misstatements 21 kB
17 AG ISA (NZ) 570 Going concern

Minor change: AG ISA (NZ) 570 - new requirements on letters of support.
35 kB
18 AG ISA (NZ) 580 Written representations 77 kB
19 AG ISA (NZ) 600 Audits of groups

Major change: AG ISA (NZ) 600 – a new auditing statement
44 kB
20 AG ISA (NZ) 700 Forming and reporting an opinion 205 kB
21 AG ISA (NZ) 705 Modifications to the opinion

Minor change: AG ISA (NZ) 705 - fix of an example audit report.
81 kB
22 AG ISA (NZ) 706 Emphasis of matter paragraphs and other matter paragraphs 101 kB
23 AG ISA (NZ) 810 Summary financial and non-financial information 67 kB
24 AG-1 Reporting to the OAG
52 kB
25 AG-2 The appropriation audit and the controller function 118 kB
26 AG-3 Effectiveness and efficiency, waste and a lack of probity or financial prudence 39 kB
27 AG-4 The audit of service performance reports 105 kB
28 AG-4 (Revised) The audit of service performance reports 156 kB

Alignment of independence and ethics statements – AG PES 1 (Revised)

The External Reporting Board has issued a single standard based on the international professional and ethics standard on Code of Ethics for Assurance Practitioners, which applies to all assurance engagements after April 2014. Previously, there were two separate standards on Code of Ethics and Independence.

As a result, we have combined the requirements contained in our two statements (AG PES 1 and AG PES 2). There are no significant changes in requirements as a result of this alignment, although some minor consequential changes have been made in the Glossary, AG PES 3, and AG-1.

One of these minor consequential changes is the inclusion of a new appendix in AG PES 1 (Revised) that reconciles the requirements contained in PES-1 (Revised) and AG PES 1 (Revised).

New auditing statement – AG ISA (NZ) 600

A new statement on the audit of groups replaces the guidance document previously provided on the Auditors’ Homepage.

This new statement contains requirements that the group appointed auditor and the auditors of components are to work cooperatively as if they are part of the same audit firm, and covers situations where:

  • a component is a public entity, in which case the requirements in AG ISA (NZ) 600 do not apply because all public entities are audited by the one auditor – the Auditor-General; or
  • a component is not a public entity, because the component is not controlled by public entities or because the component is not domiciled in New Zealand.

New requirements on letters of support – AG ISA (NZ) 570

We have included a new requirement in AG ISA (NZ) 570 that requires auditors to include an “emphasis of matter” or “other matter” paragraph in the audit report when an entity has obtained a letter of support from its parent or from another entity (such as a bank). Previously, we have not provided specific guidance in this situation, and most auditors have not included reference in an audit report to the fact that the entity has obtained a letter of support because that letter has resolved the uncertainties over the use of the going-concern assumption.

In our view, the fact that a letter of support has been required is fundamental to a readers’ understanding of the financial statements, which makes it appropriate to include a reference to this fact in the audit report. This change has also been made in anticipation of the introduction of AG ISA (NZ) 701, which is likely to require the auditor to provide positive assurance in the audit report on going-concern matters.

Fix of an example audit report – AG ISA (NZ) 705

We have made some minor changes to the example 2 audit report to resolve some omissions in the basis of opinion that were identified by an Office of the Auditor-General Opinion Review Committee and to align the opinion section with the format used in AG ISA (NZ) 705. We have included the words “would ordinarily” throughout the basis of opinion because the example 2 audit report is a full disclaimer on all elements to be audited.

Page last updated: 18 March 2014

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