Australian National Audit Office Auditing Standards 2026

AUSTRALIAN NATIONAL AUDIT OFFICE AUDITING STANDARDS 2026

EXPLANATORY STATEMENT

TABLE OF ACRONYMS

GENERAL OUTLINE

The Auditor-General and the Audit Office

1.                   The office of Auditor-General for the Commonwealth is established by the Auditor-General Act 1997 (the Act). The Auditor-General is an independent officer of the Parliament. Subject to the Act and other laws of the Commonwealth, the Auditor-General has complete discretion in the performance or exercise of their functions or powers. The Act outlines the functions and powers of the Auditor-General. An Auditor-General function means a function that the Auditor-General has under the Act or any other Act, and includes any function that the Auditor-General has when acting as auditor under the Corporations Act 2001 (Corporations Act).
2.                   The Act establishes the Australian National Audit Office (Audit Office) in Part 6. The function of the Audit Office is to assist the Auditor-General in performing Auditor-General functions. The staff of the Audit Office consists of the Auditor-General and Australian Public Service staff employed under the Public Service Act 1999. Section 27 of the Act provides that the Auditor-General may also engage persons under contract to assist in the performance of any Auditor-General function.

Authority and purpose of the Australian National Audit Office Auditing Standards

1.                   The Australian National Audit Office Auditing Standards 2026 (ANAO Auditing Standards) are made for the purposes of setting auditing standards in accordance with section 24 of the Act. Section 24 of the Act requires the Auditor-General set auditing standards that are to be complied with by persons performing any of the following functions:

                     an audit or review referred to in Division 1 (Annual financial statement audits), Division 1A (Annual performance statement audits), Division 2 (Performance audits) or Division 2A (Assurance reviews) of Part 4 of the Act;

                     an audit under section 49 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act) (Audit of annual consolidated financial statements); and

                     an audit under Division 2 of Part 7 of the Act (Audit of the Australian National Audit Office).

1.                   The ANAO Auditing Standards apply to Audit Office staff, persons engaged under contract to assist in the performance of any Auditor-General function, and the Independent Auditor of the Audit Office.
2.                   The Auditor-General does not set auditing standards for functions under Division 3 of Part 4 (Audits etc. by arrangement), or functions under Division 4 of Part 4 (Functions under other Acts). For the avoidance of ambiguity, the ANAO Auditing Standards includes a note which outlines the auditing standards which may be applicable to audits under Division 3 and Division 4 of Part 4. This note has been included for the purpose of clarity and completeness only.

Incorporation of AUASB and INTOSAI auditing standards by reference

1.                   The ANAO Auditing Standards incorporate, by reference, auditing standards made by the Australian Auditing and Assurance Standards Board (AUASB) and the International Organization of Supreme Audit Institutions (INTOSAI). The auditing standards incorporated by reference apply to the extent that the standards are not inconsistent with the Act, or other legislation.

The Australian Auditing and Assurance Standards Board

1.                   The ANAO Auditing Standards incorporate standards made by the Australian Auditing and Assurance Standards Board (AUASB) as the Auditor-General intends that audits conducted by the Audit Office should follow the same standards applying to other audits in Australia.
2.                   The AUASB is established under section 227A of the Australian Securities and Investments Commission Act 2001 (ASIC Act). Subsection 227B(1) of the ASIC Act confers on the AUASB the function to make auditing standards under section 336 of the Corporations Act for the purposes of corporations legislation (ASIC Act paragraph 227B(1)(a)) (including the sustainability standards made under section 336 of the Corporations Act), and to formulate auditing and assurance standards for sustainability and other purposes (ASIC Act paragraph 227B(1)(b)).
3.                   The AUASB standards made under paragraph 227B(1)(a) of the ASIC Act and section 336 of the Corporations Act are legislative instruments. The legislative authority for their incorporation as in force from time to time is paragraph 14(1)(a) of the Legislation Act 2003, meaning the Auditor-General may incorporate, as in force from time to time, the provisions of any disallowable legislative instrument.
4.              The AUASB standards made under paragraph 227B(1)(b) are not legislative instruments. The legislative authority for their incorporation as at their operative date is paragraph 14(1)(b) and subsection 14(2) of the Legislation Act.
5.              The AUASB standards are freely available from the AUASB’s Standards portal, https://www.auasb.gov.au/standards-guidance/auasb-standards/. The AUASB publishes additional information about AUASB standards.

The International Organization of Supreme Audit Institutions

1.              The International Organization of Supreme Audit Institutions (INTOSAI) is an independent, professional and nonpolitical organisation established as a permanent institution. INTOSAI’s purpose includes providing support to Supreme Audit Institutions (SAIs), to promote good national governance, and to set standards for public sector auditing. The Audit Office, as the SAI of Australia, is a member of INTOSAI.
2.              INTOSAI issues the International Standards of Supreme Audit Institutions (ISSAI), which are the international standards on public sector auditing, and set out the professional principles for effective and independent auditing of public sector entities.
3.              The ISSAI standards are not legislative instruments. The legislative authority for their incorporation as at their operative date is paragraph 14(1)(b) and subsection 14(2) of the Legislation Act.
4.              The ISSAI are freely available online at https://www.issai.org/professional-pronouncements/. ISSAI 100 Fundamental Principles of Public-Sector Auditing sets out the purpose and authority of the ISSAI.
5.              The external auditing standards incorporated by reference in the ANAO Auditing Standards are outlined below.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

1.              The instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
2.              The full statement of compatibility with human rights is attached to this explanatory statement (Attachment A).
   

NOTES ON CLAUSES

Part 1 – Preliminary

Section 1 – Name

1.              Section 1 specifies that the name of this legislative instrument is the Australian National Audit Office Auditing Standards 2026.

Section 2 – Commencement

1.              Section 2 provides that the instrument commences on 1 July 2026.

Section 3 – Authority

1.              Section 3 provides that the ANAO Auditing Standards are made by the Auditor-General under section 24 of the Act.
2.              This instrument is subject to disallowance and sunsetting under sections 42 and 50, respectively, of the Legislation Act.

Section 4 – Schedules

1.              Section 4 provides for the repeal of instruments listed in the Schedule. The Australian National Audit Office Auditing Standards 2024 are repealed.
2.              For the avoidance of doubt, this item repeals all previous legislative instruments made by the Auditor-General under section 24 of the Act, irrespective of whether the instrument was published in the Gazette, or registered on the Federal Register of Legislation.

Section 5 – Definitions

1.              Section 5 defines key terms used in the ANAO Auditing Standards, including terms such as ‘attestation engagement’, ‘compliance engagement’, ‘direct engagement’, and ‘materiality’. These terms incorporate the definitions as set out in the AUASB and INTOSAI standards.
2.              Pursuant to section 13(1)(b) of the Legislation Act, expressions used in this instrument have the same meaning as in the Act as in force from time to time.

Part 2 – Auditing standards

Section 6 – ANAO Auditing Standards

1.              Section 6 provides that the ANAO Auditing Standards apply:
   1.         to the extent that they are not inconsistent with the requirements of the Act, or other legislation; and
   2.       to the extent that they are relevant to the audit or review.
2.              The purpose of this provision is to clarify the hierarchy between the ANAO Auditing Standards, the Act, and other legislation, and the circumstances in which they apply in practice.

Section 7 – Annual financial statement audits

1.              The Act establishes the mandate under Division 1 of Part 4 of the Act for the Auditor-General to undertake annual financial statement audits of all Australian Government entities, including Commonwealth entities, Commonwealth companies and subsidiaries of corporate Commonwealth entities and Commonwealth companies.  Section 7 of the ANAO Auditing Standards provides that annual financial statements audits are to be conducted in accordance with standards made by the AUASB pursuant to paragraph 227B(1)(a) of the ASIC Act and section 336 of the Corporations Act.
2.              The AUASB standards made under paragraph 227B(1)(a) of the ASIC Act and section 336 of the Corporations Act are legislative instruments, meaning they are incorporated as in force from time to time.

Section 8 – Audit of annual consolidated financial statements

1.              Section 12 of the Act provides that the Auditor-General’s functions include auditing the annual consolidated financial statements, in accordance with section 49 of the PGPA Act. The consolidated financial statements present whole-of-government financial results inclusive of all Australian Government–controlled entities.
2.              Section 8 of the ANAO Auditing Standards provides that the audit of the annual consolidated financial statements is to be conducted in accordance with the standards specified in section 7, meaning, the same standards which apply to financial statements audits.

Section 9 – Annual performance statement audits

1.              Division 1A of Part 4 of the Act provides that the Auditor-General’s functions include auditing the annual performance statements of Commonwealth entities in accordance with the PGPA Act.
2.              Section 9 of the ANAO Auditing Standards provides that annual performance statements audits are to be conducted in accordance with ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information. ASAE 3000 is not a legislative instrument, meaning it is incorporated as in force on its operative date.

Section 10 – Performance audits

1.              The Act authorises the Auditor-General to conduct performance audits of Commonwealth entities, Commonwealth companies and their subsidiaries and Commonwealth partners.
2.              Division 2 of Part 4 of the Act provides that the Auditor-General may conduct:

                     performance audits of Commonwealth entities, Commonwealth companies and subsidiaries (section 17);

                     general performance audits of a particular aspect of the operations of the whole or part of the Commonwealth public sector, not limited to the operations of only one Commonwealth entity, body or person (section 18);

                     audits of the appropriateness of the performance measures of, and the reporting against those performance measures by, Commonwealth entities, Commonwealth companies, and their subsidiaries (section 18A); and

                     audits of a Commonwealth partner on the extent that the audit assesses the operations of the Commonwealth partner in relation to achieving the Commonwealth purpose (section 18B).

1.              Section 10 provides that performance audits are to be conducted in accordance with ASAE 3500 Performance Engagements, except as set out below.

                     ASAE 3500 paragraphs 37-38 relating to obtaining an understanding of internal controls relevant to the evaluation of the activity’s performance against the identified criteria, do not apply. The inclusion of these requirements would extend the scope of all audits to include consideration of internal controls relevant to the subject matter of the audit irrespective of whether these procedures are required, within the scope of the audit, to achieve the objective of the audit. Where not required in the scope of the audit these additional procedures would not add value to the audit process nor result in information that would be considered of value to users of the reports.

                     ASAE 3500 paragraph 55, in relation to the content of assurance reports, does not apply. Instead, the reporting requirements in ISSAI 3000 Performance Audit Standard paragraphs 116, 122, 124 and 126 apply.  These reporting requirements are consistent with the current practice of the ANAO in reporting conclusions, findings and recommendations in performance audit reports. Specifically, the reporting requirements of ISSAI 3000 allow for the audit conclusion to include and be presented together with other information that highlights both positive and negative aspects of performance. This is consistent with the ANAO’s purpose of improving public sector performance and supporting accountability and transparency in the Australian Government sector through independent reporting to the Parliament, the Executive and the public.

                     The terms ‘material’ and ‘materiality’ are to be used instead of ‘significant’ and ‘significance’ respectively to maintain consistency with the terminology used in other Audit Office’s audit products.

1.              For performance audits that are conducted wholly or in part as compliance engagements, to the extent that they are compliance engagements, are to be conducted in accordance with:

                     ASAE 3500 Performance Engagements;

                     ISSAI 3000 Performance Audit Standards; and  

                     ASAE 3100 Compliance Engagements

Noting the exceptions set out in section 10 of the ANAO Auditing Standards.

1.              ASAE 3500, ISSAI 3000 and ASAE 3100 are not legislative instruments, meaning they are incorporated as in force on their operative dates.

Section 11 – Assurance reviews

1.              Division 2A of Part 4 of the Act provides that the Auditor-General may conduct an assurance review of Commonwealth entities, Commonwealth companies or their subsidiaries. An assurance review is a limited assurance engagement, whereas an audit is a reasonable assurance engagement.
2.              Section 11 provides that assurance reviews of historical financial information are to be conducted in accordance with ASRE 2400 Review of a Financial Report Performed by an Assurance Practitioner Who is Not the Auditor of the Entity or ASRE 2405 Review of Historical Financial Information Other than a Financial Report. Historical financial information has the same meaning as in ASAE 3000.
3.              If an assurance review is an attestation engagement not relating to historical financial information, it is to be conducted in accordance with ASAE 3000. If the assurance review is conducted wholly (or in part) as a compliance engagement, it is also to be conducted in accordance with ASAE 3100, to the extent that it is a compliance engagement.
4.              If an assurance review is a direct engagement, it is to be conducted in accordance with ASAE 3500, except for paragraph 55 relating to assurance report content; the engagement is to instead report in accordance with the requirements of ISSAI 3000 paragraphs 116, 122, 124 and 126. If it is conducted wholly (or in part) as a compliance engagement, the assurance review is to be conducted in accordance with ASAE 3100, except for paragraph 56 relating to assurance report content, to the extent that it is a compliance engagement.
5.              ASRE 2400, ASRE 2405, ASAE 3000, ASAE 3100 and ASAE 3500 are not legislative instruments, meaning they are incorporated as in force on their operative date.

Section 12 – Audit of the Australian National Audit Office conducted by the Independent Auditor

1.              Part 7 of the Act provides that there is to be an Independent Auditor of the Audit Office. The Independent Auditor is required to audit the annual financial statements of the Audit Office. The Independent Auditor may at any time conduct a performance audit of the Audit Office.
2.              Section 12 provides that an audit of the Audit Office conducted by the Independent Auditor be carried out in accordance with the standards that would apply if the audit was undertaken by the Auditor-General.

Part 3 – Transitional provisions

Section 13 – Transitional provision

1.              The transitional provision at section 13 provides that despite Schedule 1, (irrespective of whether the audit is being conducted by the Auditor-General or the Independent Auditor), the auditing standards which apply in respect of an audit or review are:

                     the standards made under section 24 of the Act which were in force at the commencement of the relevant reporting period for:

• financial statements audits;
• audit of the annual consolidated financial statements;
• performance statements audits; and
• assurance reviews which are attestation engagements.

                     the standards made under section 24 of the Act which were in force at the commencement of the audit or review for:

• performance audits; and
• assurance reviews which are direct engagements.

Schedule 1 – Repeals

Item 1 – The whole of the instrument

1.              Item 1 of Schedule 1 repeals the Australian National Audit Office Auditing Standards 2024. The Acts Interpretation Act 1901 (AIA) subsection 33(3) provides the Auditor-General has the power to repeal an instrument made under section 24 of the Act. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
2.              For the avoidance of doubt, item 2 of Schedule 1 repeals all previous auditing standards made by the Auditor-General under section 24 of the Act, irrespective of whether the instrument was published in the Gazette, or registered on the Federal Register of.

CONSULTATION

1.              The persons likely to be affected by the ANAO Auditing Standards are staff of the Audit Office, persons engaged under contract by the Audit Office under section 27 of the Act to assist in the performance of Auditor-General functions, and the Independent Auditor.
2.              The Auditor-General consulted the Independent Auditor in recognition of the independence of the Independent Auditor, and because they are required to apply the ANAO Auditing Standards when conducting an audit of the Audit Office under Part 7 of the Act. The Independent Auditor did not raise any issues with the  ANAO Auditing Standards.
3.              The Auditor-General did not consult with the staff of the Audit Office or contractors who use, and are likely to be affected by, the ANAO Auditing Standards. These persons are under the direction of the Auditor-General and are aware that they are required to apply the standards when undertaking an Auditor-General function.

Attachment A

Statement of Compatibility with Human Rights

Prepared in accordance with the Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Australian National Audit Office Auditing Standards 2026

1.                   This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

1.                   The Auditor-General Act 1997 section 24 requires the Auditor-General to set auditing standards that are to be complied with by persons performing any of the following functions:
   •         an audit or review referred to in Division 1, 1A, 2 or 2A of Part 4;
   •         an audit under Division 2 of Part 7;
   •         an audit under section 49 of the Public Governance, Performance and Accountability Act 2013.
2.                   The ANAO Auditing Standards apply to Audit Office staff, persons engaged under contract to assist in the performance of any Auditor-General function, and the Independent Auditor of the Audit Office.

Human rights implications

1.                   This Legislative Instrument does not engage any of the applicable rights or freedoms.

Conclusion

1.                   This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.