The Auditor-General has tabled a new, updated version of the Auditor-General Auditing Standards.
What has changed and what does it mean for you?
Have you ever wondered what standards apply when we conduct our audits? Also, how QAO selects its contracted auditors, who ensures they do a good job and why some entities are exempt from our audits?
These questions are answered by the Auditor-General Auditing Standards, or AG Standards as we call them for short. We have recently updated the standards and the new version tabled in parliament on 10 December 2019.
Under the Auditor-General Act 2009, the Auditor-General must report to the Legislative Assembly on what standards apply when conducting an audit, the engagement and quality of contracted auditors, and criteria for small and low risk audits.
Where significant changes or new standards replace old, these must be reported to the Legislative Assembly. We must state the nature of the change or replacement, and the extent the change is in accordance with auditing standards set by professional or statutory bodies.
Why do we have Auditor-General Auditing Standards?
The Auditor-General may conduct an audit in the way they consider appropriate. There is no limit to the matters they may investigate and there is no required form of reporting. However, to audit efficiently and effectively, we need to apply standards.
In Australia, the Auditing and Assurance Standards Board (AUASB) establishes auditing standards.
These standards set out the basic principles and essential procedures auditors must apply. This ensures that audits are planned and performed in a manner that will support the opinion or conclusion expressed by the auditor and comply with relevant ethical requirements.
In addition to these standards, the Auditor-General has additional requirements that reflect their role as an independent officer of parliament. These include assessing the public sector's stewardship of assets and investigating financial waste and mismanagement.
What has stayed the same?
QAO will continue to conduct its audits as per the requirements issued by the Australian Auditing and Assurance Standards Board (AUASB). This is to the extent that these are not inconsistent with the requirements of the Auditor‑General Act 2009 or other applicable legislation.
What has changed?
The revised standards incorporate recommendations made in the 2017 Strategic Review of the Queensland Audit Office, and reflect changes to audit practice and associated legislation. The standards now also contain more contextual information throughout.
In the standards, we have also included appendices that provide information about the AUASB assurance standards we will use and our report tabling protocols.
A summary of the main changes is below.
Amendments
| Section | Amendment |
|---|---|
| The selection, engagement and quality control of the work of contract auditors | Incorporate consideration points when selecting audit work contracting—additional context. |
| Application of standards issued by professional and statutory bodies | Reference to professional standards—additional context. |
| Conduct of audits of public sector entities - Financial audits | Reference to key audit matters and limited assurance on internal controls—strategic review recommendation and context. |
| Communication and reporting | Additional context under performance audit. |
| Criteria for identifying if audits of public sector entities are small in size and low risk – Auditor‑General Act s.30A | The criteria for small audits have been changed to be consistent with Australian Charities and Not-for-profits reporting thresholds. |