Extant NZ AS 1 The Audit of Service Performance Information was issued in February 2019, but its effective date has been deferred twice due to concerns raised by the Office of the Auditor-General (OAG) regarding its suitability for the public sector. Consequently, the OAG has not adopted NZ AS 1. The XRB formed an Advisory Group to work through the concerns raised, resulting in an exposure draft of proposed NZ AS 1 (Revised). 

CA ANZ and CPA Australia lodged a joint submission to provide feedback on the ED. Our key points were as follows:

• We support the development of a single standard for auditing service performance information that can be applied in both the public sector and NFP sectors. 
• We support strengthening the alignment between NZ AS 1 and the reporting standard; PBE FRS 48 Service Performance Reporting.
• Given “suitable criteria” is a fundamental element of an assurance engagement, we recommend providing some justification for moving away from this terminology.
• Feedback we have received from members is that the ED is overly long and complex, which in turn gives rise to concerns about its scalability to Tier 3 entities. 
• We recommend removal of any duplicative requirements, and greater cross-referencing to the ISAs (NZ) where requirements have been adapted to emphasise linkages.  
• There are also some areas where we believe there are contrary requirements between the ED and the ISAs (NZ).
• There are a few areas in the ED we believe may involve more audit effort, and therefore increase compliance costs, compared to extant NZ AS 1.
• We recommend that a detailed analysis of the differences between the extant NZ AS 1 and NZ AS 1 (Revised) be communicated widely. This will allow firms to update their methodology and staff training, and audit software providers to update their programmes, as efficiently as possible, thereby minimising additional implementation costs.
• We recommend that the terminology in the application material be sector neutral and that examples be used to illustrate how the auditor can address sector specific nuances.
• We caution against making references to specific legislation, as legislation is subject to change.