Auditor Performance Framework Peter Crookes, Scheme Audit and Assurance.

Auditor Performance FrameworkPeter Crookes, Scheme Audit and Assurance

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Audits are a principal control for the agency’s schemes but particularly for the ERF.

• This means the integrity of audits must be maintained.

Integrity of audits

NGER Audit Program 2014-15 31 March 2015

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"Not only must Justice be done;it must also be

seen to be done."


Today I will talk about

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• How the agency manages auditor performance.

• The pilot desktop inspection programme.

• The Auditor Performance Advisory Committee.


Managing auditor performance

6NGER Audit Program 2014-15 31 March 2015

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Standard processes: gathering data

• education and client engagement

• annual reporting

• NGER Audit Programme

• registration reviews

• analysing audit reports

• surveillance and outreach visits


In progress

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• desktop inspections: pilot programme conducted recently

• audit analysis and risk profiling

• working with certification bodies, e.g. ASIC


Under development

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On-site inspections• at auditor’s premises• inspections by agency staff and others appointed by agency• both random and targeted inspections

Other• increased scrutiny of fit and proper status• checks to ensure CPD requirements met – annual selection of

auditors


Desktop inspections

What is the pilot desktop inspection programme?

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• started in August last year

• auditors from different firms provided documentation

• testing agency’s systems and processes

• gain insight into future role of desktop and physical inspections

• auditors to get more detailed feedback shortly

• desktop inspections will compliment other assessment activities, e.g. reviews – they will not replace them


Overall results

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2

3

4

5

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7Met expectations

Improvements recommended

Did not meet expectations

13 auditors assessed


Findings

Terms of engagement

• comprehensive

• appears that sufficient time allocated for audits

Management representation letters

• legislative requirements usually met

What was done well Room for improvementIndependence and conduct declarations

• signed after terms of engagement

• legislation not strictly complied with

• better use of audit standards

Peer review documentation

• lack of evidence


Terms of engagement

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The agency expects:

• Auditors should use Audit Determination Handbook template.

• Auditors must meet requirements in section 3.3 of Audit Determination.


Management representation letter

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The agency expects:

• Auditors should use Audit Determination Handbook template – not mandatory.

• Letter should be signed on same day as audit report. (No audit work to be undertaken once this is signed).

• Auditors should meet requirements in paragraph 58 of GS021.

• Auditors should meet requirements in paragraph 56 of ASAE 3000.

• Auditors must meet requirements in section 3.14(2) of Audit Determination.


Independence and conduct declarations

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The agency expects:

• Declaration for team leader should be signed same day as terms of engagement – if not before.

• Declaration for peer reviewer should be signed within five days of terms of engagement.

• Declaration for team member should be signed by the time start working on assurance engagement.

• Auditors should meet requirements of section 290 of APES 110.

• Auditors must meet requirements in section 2.4 of Audit Determination.


Peer review – taking a close look

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The agency expects:

• External peer reviewers should be engaged in writing.

• Peer reviewers should be engaged no more than 5 days after terms of engagement signed.

• Auditors must meet requirements in section 3.7(2) of Audit Determination.


Where to now?

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Desktop inspections will become part of business as usual.

Auditors can expect that:

• each year agency will select auditors to undergo desktop inspections

• auditors to submit a set of designated documentation for review, and

• on-site inspections to supplement desktop inspections.


Auditor Performance Advisory Committee

What is this committee?

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The committee will:

• supervise the conducting of on-site inspections of auditors• consist of four or five senior agency staff, and• have four advisers—both agency staff and external experts.

It will meet several times a year to:• select auditors for inspection• choose scope of inspections• appoint inspection teams, and• review findings and make recommendations to delegate.


Advantages of a committee

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• Inspections not reliant on one individual and their personal abilities and attitudes.

• Provides oversight to ensure the integrity of inspection process.

• Facilitates robust and rigorous decision-making process.

• Allows agency to make use of outside expertise e.g. former registered greenhouse and energy auditors.


Inspections

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Expected to be three or more inspections a year. These will:

> be performed on both selected auditors and on a random basis> take place at an auditor’s premises > require auditor to provide access to inspectors—including to records

and other documentation> look into the conduct of several audits by same auditor, and> likely to be performed by one expert and one agency staffer who is

an Authorised Officer.

The first inspection should take place in April or May.


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Looking at the big picture

• Audits are principal control for ERF and other schemes.

• Audits only have value if they have integrity.

• This integrity is crucial for both agency and auditors.


You can also email [email protected] or phone 1300 553 542.

Questions?Peter Crookes

mailto:[email protected]

Auditor Performance Framework Peter Crookes, Scheme Audit and Assurance.

Documents

asic nger audit program

scheme audit

audit analysis

audit work

assurance slide

audit reports surveillance

auditor performance

desktop inspections