In the gap - Old Tier 3 jobs using new AS1 (revised)?
We are now hitting a "grey zone" where auditing and reporting standards don't quite line up. A client has asked about a 31 December 2024 charity that has not yet adopted the new Tier 3 standard. The new NZ AS1 (revised) audit standard for service performance is applicable for periods beginning on or after 1 January 2024. But the Tier 3 standard is not mandatory 31 March 2025 balance dates. A client has asked how this works in term of AA templates - they should be using the "2024" T3 template for the sake of having the right AS1 (revised) content, but they are still on old Tier 3 and the 2024 template only includes reference to the new Tier 3 NFP standard.
The problem is on two levels - one the act that the checklists and reports are mismatched, and the other is that how do you apply NZ AS1 (revised) to SSPs prepared under the old reporting regime when the language is different? My suggestion is to use the 2024 template for balance dates of 31 December 2024 and after, regardless of if they have early adopted the new T3 or not, and manually update the reports. For old T3 FR checklists, use the stand-alone version and attach as a PDF into the file in place of the new T3 content. For the odd other place in the file where there are discrepancies just be aware and note that the client is still using old T3. In terms of the difference in terminology between the T3 standard and the AS1 (revised) standard, just use your judgement.
Am I right? What are other firms doing to get around these issues?
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We have decided to make a hybrid/Frankenstein T3 template that includes NZ AS1 (revised) but uses the old T3 format. I hope to have that completed tomorrow (13 March). Then you will be able to swap to that and you will just have the old T3 checklists, reports and references in there. It's actually not proving to be too hard - we probably should have done it earlier.
In terms of discrepancies in terminology between old T3 and the revised AS1, the concepts of outcomes and outputs is in the new standards even though the words aren't. You just have to go with the spirit of the revised AS1 standard when it comes to auditing the old T3.
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This is now done - a template called Tier 3 PBE Audit NZAS1 revised (2024) is available that includes the NZ AS1 (revised) requirement for jobs for year ending 31 December 2024 and later, but also includes the old Tier 3 content for clients who have not yet adopted the new Tier 3 NFP (and are not required to do so until y/e 31 March 2025).
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If treating service performance as "other information" you don't need to use this transitional template until the client goes to the new Tier 3 NFP Audit (2024) template.
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A client has noted that we have not made a corresponding template for our T3 LCE series, and when they updated a T3 LCE to the transitional template the information in the Internal Controls section did not carry over. This is because the LCE series is quite different at this point. It was an oversight on our part to not make a corresponding transitional template for these LCE series jobs. If there is enough demand we can still probably do this - let us know.
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