- NZAuASB has issued a new Agreed Upon Procedures standard under its recently revised standard setting mandate.
- The new standard applies to engagements where terms are agreed on or after 1 January 2022. Early adoption is permitted.
- NZICA will withdraw its own AUP standard with effect from this date.
Following the expansion of its standard setting mandate in 2019, the NZAuASB has now developed and released ISRS NZ 4400 Agreed Upon Procedures (ISRS NZ 4400), its new standard governing the performance of AUP engagements in New Zealand. The standard applies to all agreed upon procedures engagements where terms were agreed on or after 1 January 2022. Early adoption is permitted.
As a result, the NZ Regulatory Board of NZICA (NZRB) has decided to withdraw its own agreed upon procedures standard APS-1(revised ) Agreed Upon Procedures Engagements to report factual findings (APS-1 (revised)) with effect from 1 January 2022.
After this date, NZ members of CA ANZ will be required to comply with ISRS NZ 4400 when undertaking AUP engagements as provisions in the CA ANZ By-laws, NZICA Rules and NZICA Code of Ethics all require NZ members to comply with standards issued by the NZAuASB.
Before, this date, the NZRB has confirmed that NZ members may choose to adopt ISRS NZ 4400 early (where permitted by ISRS NZ 4400) in preference to using APS – 1 (revised). It has further directed that all engagement documentation created during the transitional period must clearly state which Agreed Upon Procedures standard is being used for the specific engagement.
Given that both the new ISRS NZ 4400 and APS-1 (revised) were based on best international practice during their recent revisions, no significant changes to current New Zealand practice are expected during the transitional period. However, NZ members will note that in ISRS NZ 4400:
- Independence is no longer a requirement (but can still be specified by engagement users);
- Report restrictions are not mandatory but can still be used;
- The role of professional judgement in the AUP engagement has been clarified.
These changes are consistent with feedback received to the NZRB’s consultation on APS-1 (revised) in 2018, subsequent international developments and the NZAuASB’s consultation on NZ ISRS 4400 in 2020.
NZ members who are not currently required to comply with NZAuASB standards should note that they will also be required to comply with any other NZAuASB standards referred to in ISRS NZ 4400 in addition to any corresponding standards issued by NZICA.
The new ISRS NZ 4400 is harmonised with its new international counterpart ISRS 4400 Agreed Upon Procedures Engagements which was released in April 2020 which will also become operative in January 2022. However, the new Australian standard ASRS 4400 Agreed Upon Procedures Engagements, released in December 2020, contains some variations from both its international and New Zealand counterparts for jurisdictional public interest reasons. The most significant of these is to mandate report restrictions, an activity the new international and New Zealand standards permit but do not require. The NZAuASB considered these changes prior to the release of its standard but decided they were not necessary in the New Zealand context.