Date posted: 17/06/2020 5 min read

Proposed NZ AUP standard – Impact on members – Have your say

NZAuASB issues exposure draft for new Agreed Upon Procedures (AUP) standard, replacing APS-1 which will be withdrawn.

In Brief

  • NZAuASB has issued an exposure draft for a new AUP standard under its recently revised standard setting mandate
  • When implemented it will replace the NZ Regulatory Board’s current professional standard APS -1 (revised) as the standard governing the conduct of these engagements by members
  • Members should review the exposure draft. Your views should be provided to us by 4 September 2020

The New Zealand Auditing and Assurance Standards Board (NZAuASB) of the External Reporting Board (XRB) has released for public comment ED 2020-2 Proposed international standard on Related services engagements (New Zealand) ISRS (NZ) 4400, Agreed-upon Procedures engagements.

The ED responds to both:

  • a change in the NZAuASB's standard setting mandate implemented by the passage of the Regulatory Systems (Economic Development) Amendment Act 2019 (the Act); and
  • the recent revision of international standard ISRS 4400 Agreed-upon Procedures Engagements approved by the International Auditing and Assurance Standards Board (IAASB) in December 2019

Change of mandate – Impact on all NZ members

The Act provides the NZAuASB with the ability to set standards for agreed upon procedures (and other related services engagements), in addition to setting standards for audit and assurance engagements.

Previously, the NZ Regulatory Board (NZRB) of the New Zealand Institute of Chartered Accountants (NZICA) set the standard that members are required to follow for AUP engagements.

The NZRB's current professional standard for AUP engagements is APS-1 (revised) Agreed Upon Procedures Engagements to Report Factual Findings which was last revised and reissued in 2018.

All NZ members of CA ANZ are required by both NZICA Rules and the NZICA Code of Ethics to comply with (amongst other things) the standards issued by both NZICA and NZAuASB. Therefore, where the NZAuASB issues a standard and it is not necessary for NZICA to also maintain a separate standard, the NZRB will generally withdraw the NZICA standard.

Consequently, once ISRS (NZ) 4400 is issued, the NZRB will move to withdraw APS-1 (revised) with effect from the date that ISRS (NZ) 4400 becomes effective. The NZAuASB currently plans to have its new standard in place for application to engagements where terms are agreed on or after 1 January 2022.

Proposed changes to AUP standard

Have your say on the NZAuASB’s proposals.

Read More

ED 2020-2 proposes to replace APS -1(revised) with the recently revised international standard ISRS 4400 Agreed-upon Procedures engagements. While APS-1(revised) was updated in 2018, the IAASB made further refinements to international best practice in finalising and reissuing ISRS 4400 in 2019.

Details of these proposed changes are explained in the NZAuASB's ITC, but the key differences are that:

  • Independence is no longer a requirement but information about what, if any, independence requirements have been complied with must be disclosed
  • Report restrictions are not mandatory but can still be used
  • The role of professional judgement in the engagement, other than in the performance of procedures, is more clearly recognised

The NZAuASB is also proposing no change to the applicable quality control requirements for AUP engagements, which continue to refer to the NZICA Professional Standard PS -1 Quality Control. This is pending the completion of the IAASB's revisions to its quality management standards (and consequential amendments to PES 3 that will also extend it to related services engagements.)

Comments are due to the NZAuASB by 15 September 2020. CA ANZ will be making a submission and welcomes your thoughts to by 4 September 2020

Better support for NZ AUP engagements

An updated New Zealand Agreed Upon Procedures standard (APS-1) provides better guidance for these engagements

Read More

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