Safeguarding the integrity of corporate reporting

Sound financial reporting structure
 
Lighthouse

Lighthouse principle:

(based on ASX Principle 4)

Corporate reporting

The integrity of our financial information is safeguarded by a number of key mechanisms.

Audit and Risk Committee

The Audit and Risk Committee independently reviews the objectivity and reliability of the Audit Office’s financial information, and ensures the financial statements are supported by appropriate management sign-off on the adequacy of internal controls. At each meeting, financial reports and budgets are presented to the committee for review. A special meeting is held annually to review the annual financial statements.

Internal audit

Our internal auditors add value and improve our operations by monitoring and providing independent and objective assurance to the Audit and Risk Committee, and ultimately the Auditor-General. The internal audit function brings a systematic, disciplined approach to evaluate and improve organisational systems, processes and reporting. The internal auditors attend each quarterly Audit and Risk Committee meeting to report on the progress of the Internal Audit Plan and present the findings of their reviews. Our internal audit function is externally resourced.

In 2015–16, the internal auditors reviewed:

  • expenditure
  • payroll
  • information security management system
  • Audit Office readiness for Public Accounts Committee quadrennial review
  • budget-setting process
  • whether previous internal audit findings had been actioned.

Separately, post implementation reviews were also conducted by external consultants on our Project Blue human resources transformation project and Elite practice management system project.

 

The year ahead

In 2016−17, our internal auditors will review:

  • information security management system
  • revenue
  • procurement
  • pricing model
  • quality assurance
  • performance management framework
  • recruitment and retention strategy
  • Auditor-General’s reporting processes
  • previous internal audit findings.

In 2016–17, we will:

  • ensure our performance reporting is based on our new strategic plan and branch business plans. Reporting will include new strategic initiatives and a suite of key performance and branch business plan indicators.
  • review our quality assurance map to confirm there are no gaps or duplication within our assurance framework.

See our strategic plan for 2016−17.

 

External audit

Pursuant to Section 47 of the Public Finance and Audit Act 1983, the Governor of New South Wales appointed an independent audit practitioner to audit the Audit Office’s financial statements. The external auditor, Nexia Australia, provides an independent opinion on whether the Audit Office’s financial statements are true and fair and comply with applicable Australian Accounting Standards. The external auditor also attends all Audit and Risk Committee meetings.

Quality Audit Review Committee

The Quality Audit Review Committee monitors the quality of our audits and gives reasonable assurance on the Audit Office’s system of audit quality control. The system needs to be appropriate and comply with the requirements of professional standards and legislation. The Quality Audit Review Committee is accountable to the Auditor-General and is chaired by the Executive Manager Governance. It comprises at least four people who are:

  • appropriately experienced and qualified
  • drawn from Performance Audit, Financial Audit or external, independent members of the profession.

Auditor-General and Management Internal Control Sign-Off

The Auditor-General certifies that the Audit Office’s financial statements give a true and fair view and are prepared in accordance with applicable Australian Accounting Standards, the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2010, the Financial Reporting Code for NSW General Government Sector Entities and the Treasurer's Directions.

This sign-off is supported by the Management Internal Control Sign-Off. The Executive Manager Finance provides written assurance that the financial statements are founded on a sound system of risk management and internal control. A checklist of minimum required procedures for this process is also completed.

Performance reporting

In 2015−16, performance against the Audit Office’s strategic plan was regularly tracked and reported to staff. Lead managers and executive sponsors met every 45 days to review milestones and key performance indicators and track progress towards achieving overall outcomes.

Regular financial and operational reports were presented to the Office Executive, Financial Audit Executive and Performance Audit Executive to monitor our audits and related reporting. These were also supported by regular reports on the performance of our corporate services activities.