External audits and reviews
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The Auditor-General Act establishes the position of the Independent Auditor, who may conduct a performance audit of the ANAO at any time. The ANAO is also committed to increasing external oversight and scrutiny over the ANAO Quality Framework, including external reviews of the quality framework and completed audits, as considered appropriate.
Section 41 of the Auditor-General Act 1997 establishes the position of the Independent Auditor. Under section 45(1) of the Act, the Independent Auditor may at any time conduct a performance audit of the ANAO. The Independent Auditor is appointed by the Governor-General on the recommendation of the Minister with the approval of the Joint Committee of Public Accounts and Audit (JCPAA). The Act requires a vacancy in the position of Independent Auditor to be filled as soon as practicable, with a term of at least three but not more than five years.
In performing or exercising their functions or powers, the Independent Auditor must have regard to the audit priorities of the Parliament for audits of the Audit Office, as determined by the Joint Committee of Public Accounts and Audit under paragraph 8(1)(n) of the Public Accounts and Audit Committee Act 1951.
The current Independent Auditor is Ms Eileen Hoggett.
The most recent Independent Auditor report — Performance Audit of Attraction, Development, and Retention of Capability — was tabled in Parliament on 15 August 2022.
Listed below are performance audits conducted by the Independent Auditor since April 2000.
- Performance Audit of Internal Budgeting and Forecasting Processes and Practices (September 2020) — status update
- Review of the ANAO’s methodology to audit performance statements (February 2019) — status update
- — The ANAO published a response and an updated response to the recommendations and current status, and the JCPAA Inquiry into Independent Auditor Report Review of ANAO Communications published the committee findings.
- (June 2013)
- (June 2012)
- (June 2011)
- (May 2010)
- (December 2008)
- (June 2004)
- (December 2002)
- (October 2001)
- (December 2000)
- (April 2000)
Australian Securities and Investments Commission Audit Inspection Report of the ANAO
The quality of ANAO audit work is reliant on the strength of its independence and quality control framework. A sound quality framework supports delivery of high-quality audit products and enables the Auditor-General to have confidence in the opinions and conclusions presented in our reports to the Parliament. This facilitates confidence of the Parliament that the ANAO operates with independence and that the audit approach meets the auditing standards set by the Auditor-General. The ANAO Quality Assurance Framework is the ANAO’s established system of quality control to provide the Auditor-General with reasonable assurance that the ANAO complies with the ANAO Auditing Standards and applicable legal and regulatory requirements, and reports issued by the ANAO are appropriate in the circumstances. The ANAO is committed to external oversight and scrutiny over the ANAO Quality Assurance Framework.
The ANAO engages the Australian Securities and Investments Commission (ASIC) to conduct an annual review of the ANAO quality assurance framework and financial statements audit files, in a similar way to the review work conducted by ASIC on external auditors in the private sector.
ASIC conducts the reviews using the ASIC methodology used for its review of audit files and quality frameworks of private sector audit firms. The ANAO sees the methodology applied by ASIC as robust and fit-for-purpose and values the feedback and better practice recommendations that ASIC provide from its experience.
ASIC is a Commonwealth entity audited by the ANAO. ASIC and the ANAO determined that the following safeguards mitigated the threats to independence created by that relationship:
- the reviews were undertaken by staff in ASIC’s Financial Reporting & Audit team with no involvement in ASIC’s financial reporting;
- these staff reported to the Auditor-General in relation to the reviews, not the Commissioners of ASIC; and
- the ASIC Senior Executive Leader overseeing the review did not provide accounting advice to the Commission.
In July 2022 ASIC provided the Auditor-General with a report on the results of its review of key areas in two ANAO audits of financial reports for the year ended 30 June 2021. In 2022 ASIC advised the ANAO that it did not have sufficient resource capacity to conduct the annual review of aspects of the ANAO’s quality control processes and quality assurance framework relating to financial statements audits. The ANAO and ASIC are discussing the timing and scope of the review of the ANAO Quality Assurance Framework.
Two 2020–21 financial statements audits were reviewed by ASIC, and findings identified in the reviewed files were assessed using the same rating categories ASIC applies in reviews of private sector audits. In accordance with established process, the ANAO subsequently performed its review on the areas identified by ASIC as ‘risk of material misstatement’ and concluded, that despite the issues identified by ASIC, sufficient and appropriate evidence was obtained and the conclusions in the issued auditor reports were appropriate.
As the Commonwealth’s statutory auditor, maintaining a focus on quality in our work is a key priority for the ANAO. Compliance with legislative requirements and policy, such as those in audit standards and methodology, is both mandatory and necessary to ensure the quality of our audit work. Further, the ANAO recognises the important role that openness to evaluation plays in building a culture focused on quality, learning and continuous improvement. To enhance organisation-wide learning from the review, senior ANAO staff have discussed the findings with financial statements audit staff to emphasise the need for teams to implement improvements in audit documentation and compliance with the ANAO audit methodology.
Listed below are the ASIC reports from reviews conducted since 2018, including the status of ANAO progress against the ASIC good practice recommendations:
- ASIC Audit Inspection Report – 12 months to 30 June 2022
- ASIC Audit Inspection Report – 12 months to 30 June 2021 (status update)
- ASIC Audit Inspection Report – 12 months to 30 June 2020 (status update)
- ASIC Audit Inspection Report - August 2019 (status update)
- ASIC Audit Inspection Report – June 2018 (status update)
The ANAO and the New Zealand Office of the Auditor-General have a long standing arrangement to conduct reciprocal performance audit peer-reviews annually, on a rotating basis. The scope of the review is not a comprehensive examination of the ANAO’s performance audit practices. Instead, this arrangement seeks to strengthen performance auditing, through the provision of constructive feedback and sharing of better practices. The peer review methodology includes examining two published audit reports against agreed criteria, drawing on information from related planning documents, audit working papers and discussion with ANAO staff. Download the most recent peer review: New Zealand Office of Auditor-General Quality Assurance Review Report December 2018.
The ANAO has considered the observations made in the peer review and assured itself that the issues raised reflect deficiencies in documentation. The ANAO is satisfied that the findings and conclusions in the audit reports are supported by sufficient and appropriate audit evidence and are appropriate in the circumstances. The ANAO has considered the better practice recommendation made in the report. Many of the recommendations are in areas where the ANAO has identified opportunities for improvement through our internal quality assurance reviews and have commenced or completed follow up actions to address these recommendations. The observations and recommendations have been shared with all performance audit staff to ensure that all teams can implement improvements in audit documentation.
Listed below are peer review reports conducted by the New Zealand Office of the Auditor-General since 2016.