General requirements

7. For the purposes of this Prudential Standard, a Level 3 Head must appoint a group auditor. This ‘Appointed Auditor’ may be the same auditor who audits a Level 3 Head for the purposes of the Corporations Act 2001. Separate auditors may be appointed to undertake the different engagements provided for in this Prudential Standard. APRA may also require a Level 3 Head to appoint another auditor, in addition to any auditor already appointed by the Level 3 Head, for the purposes of this Prudential Standard.

8. A Level 3 Head must ensure that the terms of engagement of the Appointed Auditor are set out in writing in a legally binding contract between the Level 3 Head and the Appointed Auditor and that the terms of engagement:

(a) require the Appointed Auditor to fulfil the roles and responsibilities of the Appointed Auditor as specified in this Prudential Standard and in the manner specified in this Prudential Standard; and

(b) require the Appointed Auditor, in meeting its role and responsibilities, to comply with Australian Auditing and Assurance Standards and Guidance issued from time to time by the Auditing and Assurance Standards Board (AUASB) except where:

(i) they are inconsistent with the requirements of this Prudential Standard, in which case this Prudential Standard prevails; or

(ii) APRA otherwise specifies to the Level 3 Head that alternative standards and guidance must be used by the Appointed Auditor.

9. A Level 3 Head must use all reasonable endeavours to ensure the Appointed Auditor complies with the terms of engagement contained in paragraphs 8(a) and 8(b) of this Prudential Standard.

10. For the purposes of this Prudential Standard, ‘reasonable assurance’ and ‘limited assurance’ have the meanings given in the Framework for Assurance Engagements issued by the AUASB.

11. The costs of preparing and submitting reports, documents and other material required by this Prudential Standard, whether routine or as part of a special purpose engagement (refer to paragraphs 26 to 31), must be borne by the Level 3 Head.

12. Persons involved in the provision of information (including the Appointed Auditor, officers and employees of a Level 3 Head and Level 3 institutions in the Level 3 group) must note that it is an offence under subsection 137.1 and 137.2 of the Criminal Code 1995 to provide, whether directly or indirectly, false and misleading information to a Commonwealth entity such as APRA.