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 2014‑15 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 programme, 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 2014‑15 as at Budget May 2014
    Estimate
of prior
year amounts
available in
2014‑15
$'000
+ Proposed
at Budget
2014‑15
$'000
= Total
estimate
2014‑15
$'000
Actual
available
appropriation
2013‑14
$'000
Ordinary annual services              
Departmental              
Prior year departmental appropriation   538 4 -   538 -
Departmental appropriation3   -   2,226 1 2,226 2,243
Receipts from other sources (s31)   -   35 2 35 33
Total ordinary annual services A 538   2,261   2,799 2,276
Other services              
Departmental non-operating              
Equity injections   588 4 -   588 -
Total other services B 588   -   588 -
Total net resourcing for AUASB (A+B)   1,126   2,261   3,387 2,276

1. Appropriation Bill (No. 1) 2014‑15.

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

3. Includes $0.04 million in 2014‑15 for the departmental capital budget (also refer to Table 3.2.5).

4. Estimated adjusted balance carried forward from previous year.

1.3 Budget measures

Budget measures relating to the AUASB are summarised below.

Table 1.2: Office of the Auditing and Assurance Standards Board 2014‑15 Budget measures
  Programme 2013‑14
$'000
2014‑15
$'000
2015‑16
$'000
2016‑17
$'000
2017‑18
$'000
Expense measures            
Efficiency Dividend - temporary increase in rate1 1.1 - (22) (51) (79) (79)
Efficiency Dividend - a further temporary increase of 0.25 per cent 1.1 - (6) (11) (17) (17)
Public Service efficiencies2 1.1 (1) (3) (7) (10) (10)
Reforms to APS management and
efficient procurement of agency software1
1.1 - (3) (6) (9) (9)
Total expense measures   (1) (34) (75) (115) (115)

1. This measure was included in the Economic Statement 2013 and has not previously appeared in a portfolio statement.

2. This measure was included in Budget Paper No. 2, Budget Measures 2013‑14 and has not previously appeared in a portfolio statement.

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 programmes are the primary vehicle by which government agencies achieve the intended results of their outcome statements. Agencies are required to identify the programmes which contribut
e to Government outcomes over the budget and forward years.

The AUASB's outcome is described below, specifying the strategy, programme objective, programme deliverables and programme 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, the auditor's responsibility relating to other information accompanying the financial report, auditing financial report disclosures, and the 'innovation needs and future opportunities' project.

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 entity
financial reports or for other auditing and assurance engagements
2013‑14
Estimated
actual
expenses
$'000
2014 ‑15
Estimated
expenses
$'000
Programme 1.1: Auditing and Assurance Standards Board    
Departmental expenses    
Departmental appropriation 2,240 2,224
Expenses not requiring appropriation in the budget year 114 113
Total expenses for Outcome 1 2,354 2,337
     
  2013‑14 2014‑15
Average staffing level (number) 7 7

Contributions to Outcome 1

Programme 1.1: Auditing and Assurance Standards Board
Programme 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 informal and formal feedback to the IAASB;
  • monitoring the revision of IAASB International Standards on Auditing and considering the implications for the following equivalent AUASB standards:
    • auditor reporting;
    • the auditor's responsibility relating to other information accompanying the financial report;
    • auditing financial report disclosures; and
    • the 'innovation needs and future opportunities' project;
  • 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 controls;
  • assurance on compliance engagements; and
  • assurance on 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:

  • 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 auditing Australian Financial Services Licence audit reports;
  • auditing self‑managed superannuation funds;
  • using the work of actuaries; and
  • assurance on combined reporting frameworks, including audits of 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; 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.

Programme expenses

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

Table 2.2 Programme expenses
  2013‑14
Revised
budget
$'000
2014‑15
Budget
$'000
2015‑16
Forward
year 1
$'000
2016‑17
Forward
year 2
$'000
2017‑18
Forward
year 3
$'000
Annual departmental expenses          
Departmental items 2,354 2,337 2,323 2,266 2,269
Total departmental expenses 2,354 2,337 2,323 2,266 2,269
Programme deliverables

The AUASB has the following deliverables:

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

The AUASB has the following key performance indicators:

  • issued auditing standards are high quality, developed and/or revised as required 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 and/or revised as required on a timely basis;
  • relevant guidance is issued to auditors, assurance practitioners and other users, as required on an appropriate and 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 2014‑15. It explains how budget plans are incorporated into the financial statements and provides further details of the reconciliation between appropriations, programme 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 2014‑15 and the forward years 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
2013‑14
$'000
Budget
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
Forward
estimate
2017‑18
$'000
EXPENSES          
Employee benefits 1,584 1,536 1,508 1,474 1,489
Supplier expenses 677 709 716 725 734
Depreciation and amortisation 90 89 96 64 43
Finance costs 3 3 3 3 3
Total expenses 2,354 2,337 2,323 2,266 2,269
LESS:          
OWN-SOURCE INCOME          
Revenue          
Sale of goods and rendering of services 33 35 36 37 39
Total revenue 33 35 36 37 39
Gains          
Other 24 24 24 24 24
Total gains 24 24 24 24 24
Total own-source income 57 59 60 61 63
Net cost of (contribution by) services 2,297 2,278 2,263 2,205 2,206
Appropriation revenue 2,207 2,189 2,167 2,141 2,163
Surplus (deficit) attributable to the Australian Government (90) (89) (96) (64) (43)
Note: Impact of Net Cash Appropriation Arrangements
  2013‑14
$'000
2014‑15
$'000
2015‑16
$'000
2016‑17
$'000
2017‑18
$'000
Total Comprehensive Income
(loss) less depreciation/amortisation expenses
previously funded through revenue appropriations
- - - - -
plus depreciation/amortisation expenses
previously funded through revenue appropriations
(90) (89) (96) (64) (43)
Total Comprehensive Income
(loss) - as per the Statement of Comprehensive Income
(90) (89) (96) (64) (43)

Prepared on Australian Accounting Standards basis.

Table 3.2.2: Budgeted departmental balance sheet
(as at 30 June)
  Estimated
actual
2013‑14
$'000
Budget
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
Forward
estimate
2017‑18
$'000
ASSETS          
Financial assets          
Cash and equivalents 200 200 200 200 200
Trade and other receivables 945 926 899 903 947
Total financial assets 1,145 1,126 1,099 1,103 1,147
Non-financial assets          
Infrastructure, plant and equipment 172 112 54 43 41
Intangibles 19 27 25 12 8
Other 4 4 4 4 4
Total non-financial assets 195 143 83 59 53
Total assets 1,340 1,269 1,182 1,162 1,200
LIABILITIES          
Provisions          
Employees 160 199 239 280 323
Other 140 142 143 140 140
Total provisions 300 341 382 420 463
Payables          
Suppliers 36 36 36 36 36
Other 161 101 32 1 1
Total payables 197 137 68 37 37
Total liabilities 497 478 450 457 500
Net assets 843 791 732 705 700
EQUITY          
Contributed equity 163 200 237 274 312
Asset Revaluation Reserve 39 39 39 39 39
Retained surpluses or accumulated deficits 641 552 456 392 349
Total equity 843 791 732 705 700
Current assets 1,147 1,129 1,101 1,107 1,151
Non-current assets 191 139 80 54 49
Current liabilities 341 380 418 454 495
Non-current liabilities 154 97 31 2 5

Prepared on Australian Accounting Standards basis.

Table 3.2.3: Budgeted departmental statement of cash flows
(for the period ended 30 June
  Estimated
actual
2013‑14
$'000
Budget
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
Forward
estimate
2017‑18
$'000
OPERATING ACTIVITIES          
Cash received          
Goods and services          
Appropriations 2,207 2,189 2,167 2,141 2,163
Other 355 55 62 37 39
Total cash received 2,562 2,244 2,229 2,178 2,202
Cash used          
Employees 1,572 1,498 1,468 1,433 1,446
Suppliers 980 746 761 733 711
Other - - - 12 45
Total cash used 2,552 2,244 2,229 2,178 2,202
Net cash from (used by) operating activities 10 - - - -
INVESTING ACTIVITIES          
Cash used          
Purchase of property, plant and equipment 38 37 37 37 38
Total cash used 38 37 37 37 38
Net cash from (used by) investing activities (38) (37) (37) (37) (38)
FINANCING ACTIVITIES          
Cash received          
Contributed equity 38 37 37 37 38
Total cash received 38 37 37 37 38
Net cash from (used by) financing activities 38 37 37 37 38
Net increase (decrease) in cash held 10 - - - -
Cash at the beginning of the reporting period 190 200 200 200 200
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 2014‑15)
  Retained surpluses
$'000
Asset revaluation reserve
$'000
Other reserves
$'000
Contributed equity/ capital
$'000
Total equity
$'000
Opening balance as at 1 July 2014          
Balance carried forward from previous period 731 39 - 127 897
Adjusted opening balance 731 39 - 127 897
Comprehensive income          
Surplus (deficit) for the period (90) - - - (90)
Total comprehensive income recognised directly in equity (90) - - - (90)
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 2015 641 39 - 163 843

Prepared on Australian Accounting Standards basis.

Table 3.2.5: Departmental capital budget (DCB) statement
  Estimated
actual
2013‑14
$'000
Budget
estimate
2014‑15
$'000
Forward
estimate
2015‑16
$'000
Forward
estimate
2016‑17
$'000
Forward
estimate
2017‑18
$'000
NEW CAPITAL APPROPRIATIONS          
Capital budget - Bill 1 - DCB 36 37 37 37 38
Total new capital appropriations 36 37 37 37 38
Provided for:          
Purchase of non-financial assets 36 37 37 37 38
Total Items 36 37 37 37 38
PURCHASE OF NON-FINANCIAL ASSETS          
Funded by capital appropriation - DCB 38 37 37 37 38
TOTAL 38 37 37 37 38
RECONCILIATION OF CASH USED TO ACQUIRE ASSETS TO ASSET MOVEMENT TABLE          
Total purchases 38 37 37 37 38
Total cash used to acquire assets 38 37 37 37 38

Prepared on Australian Accounting Standards basis.

Table 3.2.6: Statement of asset movements — departmental
  Buildings
$'000
Other infrastructure,
plant & equipment
$'000
Intangibles
$'000
L&B, IP&E
held for sale
$'000
Total
$'000
As at 1 July 2014          
Gross book value - 615 72 - 687
Accumulated depreciation/amortisation and impairment - 443 53 - 496
Opening net book balance - 172 19 - 191
Capital asset additions          
By purchase - appropriation ordinary annual services - 19 18 - 37
Total additions - 19 18 - 37
Other movements          
Depreciation/amortisation expense - 79 10 - 89
Total other movements - 79 10 - 89
As at 30 June 2015          
Gross book value - 634 90 - 724
Accumulated depreciation/amortisation and impairment - 522 63 - 585
Closing net book balance - 112 27 - 139

Prepared on Australian Accounting Standards basis.