Australian National Audit Office (ANAO) Auditing Standards (30 Nov 2012)

Overview

The Australian National Audit Office (ANAO) Auditing Standards, established under section 24 of the Auditor-General Act 1997, are designed to ensure that persons performing audits or reviews within the scope of the Act adhere to a uniform set of standards. This Act was enacted to address the need for a consistent and reliable framework for audits and reviews carried out by the ANAO. The policy objective behind these standards is to enhance the credibility and effectiveness of audits and reviews conducted by the ANAO, thereby contributing to improved accountability and transparency in public administration and financial management. These standards include those issued by the Australian Auditing and Assurance Standards Board and the former Australian Accounting Research Foundation, and they supersede all previous auditing standards set under the Act. The enactment of these auditing standards by the Parliament aims to uphold the integrity of public sector audits and reviews, ensuring they are conducted in accordance with best practices and recognised standards. The standards encompass a wide range of audit activities, including statement audits, performance audits, assurance reviews, and audits of the ANAO itself and the Finance Minister’s annual financial statements. By setting these auditing standards, the Act seeks to provide a robust and reliable foundation for the ANAO’s auditing activities, ultimately supporting the broader goal of enhancing public sector accountability and governance.

Scope and Application

The ANAO Auditing Standards set forth in the legislation apply to any person who performs an audit or review as specified in the Auditor-General Act 1997, encompassing audits and reviews related to statement audits, performance audits, assurance reviews, audits of the Australian National Audit Office, and audits of the Finance Minister’s annual financial statements. These standards are designed to ensure consistency and compliance with the Act and other relevant legislation. The standards include those made by the Australian Auditing and Assurance Standards Board and certain standards formulated by the former Australian Accounting Research Foundation on behalf of CPA Australia and The Institute of Chartered Accountants in Australia. The standards apply nationally, extending to any audit or review conducted within the Commonwealth of Australia. While these standards aim to provide a comprehensive framework, they are subject to any inconsistencies with the Act or other pertinent legislation and are applicable only to the extent relevant to the specific audit or review activity. This legislation ensures that all audits and reviews conducted by relevant persons adhere to a consistent and recognised standard of practice, thereby maintaining the integrity and reliability of the audit processes.

Key Provisions

Section 24 of the Auditor-General Act 1997 mandates the Auditor-General to set auditing standards applicable to various audit and review functions. These functions include statement audits, performance audits, assurance reviews, audits of the Australian National Audit Office, and the audit of the Finance Minister's annual financial statements (section 1). The ANAO Auditing Standards are established based on the standards set by the Australian Auditing and Assurance Standards Board (AUASB) and the Australian Accounting Research Foundation, provided they are current and applicable to the relevant audit or review activities (section 2). These standards encompass a range of areas, including special considerations for audits, engagements to report on summary financial statements, and assurance reports on controls at service organisations, among others (section 2). The obligations imposed by the ANAO Auditing Standards require compliance with the specified standards for audits and reviews performed under the Act. Auditors and reviewers must ensure that their work adheres to the outlined standards, which include those formulated by the AUASB and the Australian Accounting Research Foundation (section 2). This requirement extends to the use of standards such as ASA 805, ASA 810, ASRE 2400, and others, as detailed in the Act. The purpose is to maintain consistency and quality in the auditing and review processes across different entities and functions governed by the Act. Failure to comply with the ANAO Auditing Standards can lead to various consequences. Although the specific penalties are not detailed in the Act, non-compliance could result in civil or criminal liabilities, depending on the nature and severity of the breach. The Auditor-General has the authority to enforce these standards, and any failure to adhere to them may lead to formal actions, including investigations and potential legal proceedings. The maximum penalties for breaches are not explicitly stated but could include fines, sanctions, or other legal repercussions as determined by relevant authorities. The Act revokes all previous auditing standards set under section 24, ensuring that only the current ANAO Auditing Standards are in effect. This update aims to streamline and modernise the auditing framework, incorporating the most recent and relevant standards to enhance the quality and reliability of audits and reviews conducted under the Act. By setting these standards, the Act provides a clear and comprehensive guideline for auditors and reviewers, facilitating effective oversight and accountability.