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Statutory Audit Report – All MattersApplicationType of audit and assurance work:Types of entities:These instructions apply to:financial statement audit engagements performed in accordance with section 41C or section 45F of the Public Finance and Audit Act 1983 (PF&A Act)particular audits performed in accordance with section 45 of the PF&A Act.departmentsstatutory bodiesstatutory (but not company) stateowned corporationscompaniesuniversitiesdoes NOT apply to local and county councils, joint organisations or council entities.InstructionsStatutory Audit Reports (SARs) are mandatory for all audits of State government agencies’ financial statements, except request audits. Before issuing the SAR, the Engagement Controller (EC) should:ensure it includes all significant matters arising from the audit and briefly report unresolved matters identified in previous auditsdiscuss the form, timing and expected content of the SAR with managementseek responses from management to matters raised before including them in the SAR. Responses should indicate whether management concurs with audit findings and/or other pertinent commentsdiscuss the draft SAR with those charged with governance.The Engagement Quality Control Reviewer (EQCR), if appointed, needs to review the SAR to ensure all significant matters are appropriately reported or to confirm there are no significant matters to report.If the EC or EQCR believes the SAR contains matters the AuditorGeneral (AG) should be aware of, they need to brief the AG. Issuing the SARECs need to ensure:SARs are issued on a timely basis, i.e. during the year, as required, and at yearend on the same day as the Independent Auditor’s Report (IAR)SARs and IARs are signed by the same personFor an inhouse audit – SARs are only issued after completing the following Iris forms:the ‘Other auditing and completion procedures’ (in ‘Update preliminary assessments and other completion procedures’ folder)‘Engagement leader and team manager – Completion signoff’the ‘Engagement leader and team manager signoff (supplemental publicsector considerations)’ the ‘Quality review partner – Completion signoff’ (if applicable)‘Engagement Executive – Completion signoff’ (if applicable)For an audit conducted by an audit service provider (ASP) – SARs are only issued after completing the following Iris forms:‘Engagement leader and team manager signoff – Completion’‘Engagement leader and team manager signoff – Completion (supplemental public sector considerations)’‘Quality review partner – Completion signoff’ (if applicable)SARs are addressed to the Treasurer, the Minister(s) and the Department Head / Chief Executive Officer (CEO) of the auditeeseparate reports are addressed and sent to any person charged with governance not included above (refer to the ‘Objective’ section below).Additional instructions for ASPsIssuing the SARASPs need to ensure draft SARs:are provided to the EC at the same time as the ASP recommends the EC signs the Independent Auditor’s Report (IAR)are provided with sufficient time to enable the EC to issue the SAR on a timely basis, i.e. during the year, as required, and at yearend on the same day as the IAR is issued.CBS will:remove the bold text from this documentcreate separate reports for the Minister(s) and Treasurercreate a letter for the Portfolio Minister(s), where the Portfolio Minister is not the Shareholding Minister(s) (see instruction below)delete the phrase ‘that are relevant to you in your role as one of those charged with the governance of [Auditee Name]’ in the first paragraph for reports to the Treasurerdelete the second sentence ‘I enclose the Independent Auditor’s Report, together with [abbreviated name]’s financial statements’ in the second paragraph for reports to the Minister and Treasurerdelete the sentence ‘Please respond to all the matters raised above in [abbreviated name]’s annual report, as required by the Annual Reports legislation’ in the ‘Significant matters’ section for reports to the Minister and Treasurerdelete the ‘Management letter’ section for reports to the Treasurer and head of the entitycheck pagination in the document, including the appendices, is continuousdelete the ‘Publication of the Statutory Audit Report’ section for reports to the Minister and Treasurerdelete the words ‘Portfolio Minister’ and/or ‘Shareholding Minister’ from Ministers’ correspondence detailssave all three reports in bined or group SARsWhere appropriate, a combined or group SAR may be issued to a Minister and the Treasurer. Combined SARs are rarely issued and the decision to do so must be approved by an Assistant AuditorGeneral.Sending SARs to Portfolio Minister(s) when they are different to Shareholding Minister(s)Where oversight of an entity falls under the mandate of a Shareholding Minister and a Portfolio Minister, the EC must send the SAR to the Shareholding Minister, not the Portfolio Minister because the relevant Acts do not specify the Portfolio Minister as a recipient of the SAR (refer to sections 43(2) and 45I(2) of the PF&A Act and section 24A of the State Owned Corporations Act 1989).To discharge our obligations under ASA 260 ‘Communication with Those Charged with Governance’, the EC must send a tailored Letter to the Portfolio Minister, without the heading ‘Statutory Audit Report’. Refer to specific instructions in the text boxes on how to tailor this template for this circumstance.ObjectiveThis template prescribes the format and content of an SAR for all matters to be reported and, where appropriate, the Letter to the Portfolio Minister. This template and accompanying instructions help audit teams meet their legal and professional reporting obligations for audits of financial statements.DocumentationSave the original signed SAR (prepared on this crested template) and any related letters to those charged with governance in both the auditee’s HPCM zfile container and the audit file.Use continuous page numbering within the SAR and appendices.Additional instructions for ASPsScan and save the original signed SAR (prepared on this crested template) and any related letters to those charged with governance in the audit file.BackgroundThe SAR requirements for audits of statutory bodies (including State Owned Corporations (SOCs) and departments are contained in sections 43(2) and 45I(2) of the PF&A Act respectively. A similar provision exists for particular audits under section 45(2).The SAR meets our statutory obligations to report to the Minister, the Treasurer and Department Head / CEO, but does not fully meet our professional obligations to report matters to all of those charged with governance. This is primarily achieved through the Engagement Closing Report.In most cases, the relevant Minister and Department Head / CEO are considered to be within the definition of those charged with governance (refer to ‘Determining who are those charged with Governance of a Public Sector Entity’). However, the definition in the auditing standards extends beyond the prescribed addressees of the SAR. Persons charged with governance include persons responsible for overseeing the strategic direction of the entity and obligations related to the accountability of the entity.380772455832Contact:Phone no:Our ref:020000Contact:Phone no:Our ref:[Name][Chief Executive Officer / Secretary / Department Head][Auditee Name][Auditee Address line 1][Auditee Address line 2][Date]Dear [Mr / Mrs / Ms / Minister / Treasurer]STATUTORY AUDIT REPORTfor the year ended [date][Auditee Name]Do not remove bold type. Please refer to instructions section.I have audited the financial statements of [Auditee Name] (the?[abbreviated name]) as required by the Public Finance and Audit Act 1983 (PF&A Act). This Statutory Audit Report outlines the results of my audit for the year ended [date], and details matters I found during my audit that are relevant to you in your role as one of those charged with the governance of [abbreviated name]. The PF&A Act requires me to send this report to [abbreviated name], the Minister and the Treasurer.This report is not the Independent Auditor’s Report, which expresses my opinion on [abbreviated name]’s financial statements. I enclose the Independent Auditor’s Report, together with [abbreviated name]’s financial statements.[OR]When this template is used to discharge the Audit Office’s obligation to report to the Portfolio Minister (where the Portfolio Minister is not the Shareholding Minister) replace the heading ‘Statutory Audit Report / for the year ended [date] / [Auditee Name]’ with ‘Audit of [Auditee Name] for the year ended [date]’ and include the following:I am reporting to you because I consider you to be a person charged with the governance of [Auditee Name] as required by Australian Auditing Standards.This letter outlines the results of my audit of the financial statements of [abbreviated name] for the year ended [date], and details significant matters found during the audit, which are relevant to you in your role as one of those charged with the governance of [abbreviated name].My audit is designed to obtain reasonable assurance the financial statements are free from material misstatement. It is not designed to identify and report all the matters you may find of governance interest. Therefore, other governance matters may exist that I have not reported to you.My audit is continuous. If I identify new significant matters, I will report these to you immediately.Audit resultI expressed an unmodified opinion on [abbreviated name]’s financial statements and I have not identified any significant matters since my previous Statutory Audit Report.When preparing a letter to the Portfolio Minister and an unmodified opinion was issued with no significant matters to report, replace the sentence above with:I expressed an unmodified opinion on [abbreviated name]’s financial statements.[OR]While I expressed an unmodified opinion on [abbreviated name]’s financial statements, I identified the following significant matters.[OR]I expressed a [qualified / adverse / disclaimer of] opinion on [abbreviated name]’s financial statements due to [state reasons].[Emphasis of Matter / Other Matter paragraph]Without modifying my opinion, I included an [Emphasis of Matter / Other Matter] paragraph in my Independent Auditor’s Report. [Include details where an ‘Emphasis of Matter’ paragraph or an ‘Other Matter’ paragraph is included in the Independent Auditor’s Report. For an Emphasis of Matter, the heading must include the words ‘Emphasis of Matter’ as required by paragraph 9a of ASA 706.]Significant mattersThe following significant matters came to my attention during the audit.[Insert details of significant matters including any recommendations].Include the following paragraph if the auditee is subject to the Annual Reports legislation. CBS will delete this wording for reports to the Treasurer and the Minister(s).Please respond to all the matters raised above in [abbreviated name]’s annual report, as required by the Annual Reports legislation.Matters of governance interestList matters of governance interest identified during the audit and, where appropriate, matters from previous audits the auditee has not fully addressed. Refer to the instructions section (above) and ASAs 260 and 265 for guidance.[Insert matter heading][Insert details].Quality and timeliness of financial reportingWhere the auditee has made a poor attempt at early close procedures and/or submitted the financial statements and/or financial information to Treasury after the date set out in the Direction, audit teams need to report this below. Significant breaches may be reported to the Minister and Treasurer in an interim Statutory Audit Report. [Insert details].Misstatements in the financial statementsMisstatements (both monetary and disclosure deficiencies) are differences between what has been reported in the financial statements and what is required in accordance with the [abbreviated name]’s financial reporting framework. Misstatements can arise from error or fraud.I have certain obligations for reporting misstatements:the PF&A Act requires agencies to obtain the AuditorGeneral’s approval for all changes to the financial statements originally submitted for audit. The more significant/material changes are reported in a Statutory Audit Reportthe Auditing Standards require matters of governance interest and significant misstatements identified during the audit to be communicated to those charged with governancestatutory obligations require the AuditorGeneral to report misstatements resulting from or not detected because of failures in internal controls and/or systemic deficiencies which pose a significant risk to [abbreviated name].Select the appropriate paragraph below.The financial statements did not contain misstatements.[OR][The Appendix / Appendix One] lists and explains the nature and impact of the misstatements contained in the financial statements.Tailor the tables below to align with the tables included in [the Appendix / Appendix One].Table one reports significant uncorrected misstatements and disclosure deficienciesTable two reports the effect on the reported net result of misstatements that have not been corrected in the period in which they occurredTable [three] reports prior period errors corrected retrospectivelyTable [four] reports significant corrected misstatements and disclosure deficiencies.If the misstatements are due to fraud, it may be inappropriate to communicate this in the SAR.Additional guidance on reporting fraud and error is available on Alfie.Based on my evaluation, [none / some / all] of the misstatements reported are due to fraud. [If the misstatements are due to fraud, specify which misstatement is due to fraud and the nature of the fraud].Where misstatements constitute a significant item for reporting in the SAR, audit teams must include an appropriate paragraph under the ‘Audit result’ paragraph above.Other financial reporting adjustmentsUse this section to report other material financial reporting adjustments management has made to the financial statements after they have been submitted for audit. For example, actuarial revaluations not available at the time of submitting the financial statements, updates on legal claims etc. Example wording has been provided below.The [abbreviated name] made the following adjustments to the financial statements following submission for audit.[Include details of other financial reporting adjustments made by management and the reason for the adjustments e.g. the adjustments reflect additional information available to the [abbreviated name] after submission of the financial statements for audit.]Compliance with legislative requirementsSelect the appropriate paragraph below.Report instances of noncompliance with laws and regulations, such as noncompliance with financial management provisions (e.g. authority to incur expenditure, delegations, etc) of the:entity’s enabling legislationPublic Finance and Audit Act 1983 Government Sector Finance Act 2018that in the auditor’s judgement are more than clearly trivial. My audit procedures are targeted specifically towards forming an opinion on [abbreviated name]’s financial statements. This includes testing whether [abbreviated name] complied with key legislative requirements relevant to the preparation and presentation of the financial statements. The results of the audit are reported in this context. My testing did not identify any reportable instances of noncompliance with legislative requirements.[OR]My audit procedures are targeted specifically towards forming an opinion on [abbreviated name]’s financial statements. This includes testing whether [abbreviated name] complied with key legislative requirements relevant the preparation and presentation of the financial statements. The results of the audit are reported in this context. My testing identified the following instances of noncompliance:[include findings].Significant instances of noncompliance with key legislation will be reported in the AuditorGeneral’s Report to Parliament.AuditorGeneral’s Report to ParliamentThe [202X] AuditorGeneral’s Report to Parliament will incorporate the results of the audit.The ‘Management Letter’ section below is only included in the report to the Minister(s). The Audit Office’s CBS team will delete this section for reports to the Treasurer and the head of the auditee.Management LetterSelect the appropriate option belowOption 1 – Planning / Interim and or final management letter(s) have been issued.I issued [a planning], [an interim], [AND / OR] [a final] Management Letter to [Name of Department Head / Chairperson / CEO] in [month] which included observations from the [planning / interim / final phase[s] of my audit. I believe these matters [are /are not] significant and have therefore [mentioned / not mentioned] them in this report. [This / These] letter[s] also include[s] management’s responses to the matters raised.Option 2 – a management letter still needs to be issued.[I issued [a planning], [AND / OR] [an interim] Management Letter to [Name of Department Head / Chairperson / CEO] in [month] which included observations from the [planning / interim / phase[s] of] my audit.]In [Month / Year] I expect to send a Management Letter [from the final phase of my audit] to [Department Head / Chairperson / CEO] which includes observations from my audit. This letter will also include management’s responses to the matters raised.I believe the observations in [the / these] letter(s) [are / are not] significant and have therefore [mentioned / not mentioned] them in this report. Please contact [Name of Department Head / Chairperson / CEO] for a copy of the letter[s].Option 3 no Management Letter will be issued.As no matters have come to my attention, I will not issue a Management Letter.The ‘Publication of the Statutory Audit Report’ section below is only included in the report to the head of the auditee. CBS will delete this section for reports to the Treasurer and Minister(s).Publication of the Statutory Audit ReportI consider this Statutory Audit Report to fall within the definition of ‘excluded information’ contained in Schedule 2(2) of the Government Information (Public Access) Act 2009. Under Schedule 1(6) of this Act, please seek the Audit Office’s consent before releasing this report publicly. Agencies are advised to also seek approval from the Minister(s) and the Treasurer before publishing this report.AcknowledgmentI thank [abbreviated name]’s staff for their courtesy and assistance.Yours sincerely[Name of Officer][Position of signing officer – optional at the signing officer’s discretion]Delegate of the AuditorGeneral for New?South?WalesAudit teams must complete the details below:Official Minister’s name ()Minister’s Portfolio/Title (only cite Minister’s portfolio relevant to the auditee)Ministerial Office Address ()Minister’s capacity (Portfolio Minister/Shareholding Minister) – this helps CBS identify the recipient of each letter (see below). CBS will delete this information.Where a statutory SOC’s Portfolio Minister is not the Shareholding Minister (refer to section 24A of the State Owned Corporations Act 1989) the:Shareholding Minister(s) receives the Statutory Audit ReportPortfolio Minister(s) receives the Letter ‘Audit of [Auditee Name] for the year ended [date]’.[Official Minister Name (e.g. The Hon Victor Dominello MP)][Title – cite the portfolio relevant to the auditee e.g. Minister for Customer Service] Capacity: [Portfolio Minister / Shareholding Minister][Ministerial Office Address][Official Minister Name (e.g. The Hon Damien Tudehope MLC)][Title – cite the portfolio relevant to the auditee e.g. Minister for Finance and Small Business]Capacity: [Portfolio Minister / Shareholding Minister][Ministerial Office Address][Official Treasurer Name]Treasurer[Address]APPENDIX [ONE]Continue this appendix’s pagination from the previous section. If there is more than one appendix, name this appendix as ‘Appendix One’ and then renumber municating the $ value of the deminimus threshold is optional and a matter for the EC’s professional judgement.If monetary misstatements and / or disclosure deficiencies were not identified or corrected, delete the relevant table(s) below.Reporting uncorrected monetary misstatements and disclosure deficiencies is mandatory.Reporting corrected misstatements is mandatory if a correction is individually material or the number of corrections above de minimus indicates there are issues with the quality of financial statement preparation. Quality concerns should be raised in the Management Letter and, where significant in this SAR.The format below is recommended, but can be altered to meet the needs of users. However, misstatements must be disclosed in order of significance and should not be netted. Disclose the nature or reasons for each misstatement greater than deminimus.Corrected and uncorrected monetary misstatements should distinguish between factual and judgemental misstatements.Do not include projected errors in the tables below since we do not advise auditees to correct such errors. If they indicate a control deficiency and / or systemic weaknesses, it may be appropriate to report the deficiency in the ‘Significant Matters’ section of this SAR.Trivial misstatements may be reported below if, in aggregate, they are significant, or if the number of misstatements indicates poor control over the financial statement preparation process.Table one: Uncorrected monetary misstatements and disclosure deficienciesUncorrected monetary misstatementsThe following uncorrected monetary misstatements were identified and discussed with management. I have received written representations from [name] on [date] confirming management’s belief the effect of not correcting these misstatements is immaterial, individually and in aggregate, to the financial statements as a whole. I agree with management’s determination and do not consider the uncorrected misstatements significant enough to modify my opinion in the Independent Auditor’s Report.The table below should include misstatements identified by audit and management. To indicate a misstatement was identified by management insert an asterisk after the description of the misstatement. For example: [description]*Delete the footnote below the table if the audit team identified all the misstatements.DescriptionAssetsLiabilitiesNet resultOther comprehensive incomeEffect of potential correctionIncrease/(decrease)(Increase)/decrease(Increase)/decrease(Increase)/decrease$’000$’000$’000$’000Factual misstatements[description]SubtotalJudgemental misstatements[description]SubtotalTotal impact if misstatements were correctedMisstatement identified by management.If no uncorrected monetary misstatements were identified, delete the table and paragraph above and replace with the following sentence.I did not detect any reportable monetary misstatements that remain uncorrected in the financial statements.Uncorrected disclosure deficienciesThe following uncorrected disclosure deficiencies were identified and discussed with management. I have received written representations from [name] on [date] confirming management’s belief the effect of not correcting these deficiencies is immaterial to the financial statements as a whole. I agree with management’s determination and do not consider the uncorrected deficiencies significant enough to modify my opinion in the Independent Auditor’s Report.Include each disclosure deficiency in a separate row within the table.The table below should include misstatements identified by audit and management. To indicate a misstatement was identified by management insert an asterisk after the description of the misstatement. For example: [description]*Delete the footnote below the table if the audit team identified all the misstatements.AASB referenceDisclosure titleDescription of disclosure deficiency[e.g. AASB 16][Leases – Entity as lessee][Information on income from subleasing rightofuse assets was not separately disclosed in the notes to the financial statements.]Misstatement identified by management.If no uncorrected disclosure deficiencies were identified, delete the table and paragraph above and replace with the following sentence.I did not detect any reportable disclosure deficiencies that remain uncorrected in the financial statements.Delete the following if not applicable to the auditee.Table two: Effect of misstatements on the reported net resultTo fully understand the current year’s financial result, those charged with governance should consider the impact of misstatements from previous years corrected in the current period and current period misstatements that remain uncorrected.This table illustrates the effect of significant misstatements that have not been corrected in the period in which they occurred.The ‘Current year misstatements that have not been corrected’ line item should agree with the ‘Total impact on Net result if misstatement were corrected’ amount reported in Table one.Description and effectNet result(Increase)/decrease$’000Net result as reportedPrior year transactions recorded in the current year’s net result#Current year misstatements that have not been correctedAdjusted current year net resultThis includes:misstatements reported in previous years corrected in the current year’s net result.transactions identified and recorded in the current year, which relate to a prior period.Table three: Prior period errors corrected retrospectivelyThe table below summarises prior period transactions identified during the current year that have been corrected retrospectively. Management believes these errors are so significant they require restatement of [abbreviated name]’s previously published financial statements. The impact of the restatement has been detailed in the notes to the financial statements.The table below should include misstatements identified by audit and management. To indicate a misstatement was identified by management insert an asterisk after the description of the misstatement. For example: [description]*Delete the footnote below the table if the audit team identified all the misstatements.Nature and impact of prior period transactions corrected retrospectively[Heading descriptor – e.g. Treatment of Aboriginal land claims][Description – e.g. The State previously recognised a liability equal to the fair value of land subject to a successful Aboriginal land claim. The State concluded the land should have been fully impaired when a successful claim was established. Retrospective correction of the error reduced the prior year comparatives for land and buildings (within property, plant and equipment) and other liabilities by $XXX?million, as disclosed in note XX to the financial statements.]Misstatement identified by management.Report corrected misstatements if a correction is individually material, or the number of corrections above de minimus indicates there are issues with the quality of financial statement preparation. Quality concerns should be raised in the Management Letter and, where significant, the Statutory Audit Report.Table four: Corrected monetary misstatements and disclosure deficienciesCorrected monetary misstatementsManagement corrected the following misstatements in the current year’s financial statements. I agree with management’s determination and confirm this treatment complies with Australian Accounting Standards.The table below should include misstatements identified by audit and management. To indicate a misstatement was identified by management insert an asterisk after the description of the misstatement. For example: [description]*Delete the footnote below the table if the audit team identified all the misstatements.DescriptionAssetsLiabilitiesNet resultOther comprehensive incomeEffect of correctionIncrease/(decrease)(Increase)/decrease(Increase)/decrease(Increase)/decrease$’000$’000$’000$’000Factual misstatements[description]SubtotalJudgemental misstatements[description]SubtotalTotal impact of corrected misstatementsMisstatement identified by management.Corrected disclosure deficienciesManagement corrected the following disclosure deficiencies in the current year’s financial statements. I agree with management’s determination and confirm this treatment complies with Australian Accounting Standards.Include each disclosure deficiency in a separate row within the table.The table below should include misstatements identified by audit and management. To indicate a misstatement was identified by management insert an asterisk after the description of the misstatement. For example: [description]*Delete the footnote below the table if the audit team identified all the misstatements.AASB referenceDisclosure titleDescription of disclosure deficiency[e.g. AASB 16][Leases – Entity as lessee][Detailed information relating to significant judgements and assumptions made in determining the lease term was not included in the notes to the financial statements.]Misstatement identified by management. ................
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