Audit Service Level Agreement
Administrative Guidelines for the conduct of audits
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Commencement of Audits Conduct of Audits Methodology Planning Operations Documentation Report Preparation and exit meeting Audit Coordinator Follow-up audits Management of Internal Audits Quality Assurance Audit Coordinator liaison Meetings with senior management Audit Committee Meetings ANAO Liaison Performance Assessment 1 1 1 2 2 2 2 3 3 4 4 4 4 4 5 6
1 Commencement of Audits
This document details the internal audit processes to be followed in ACMA. The term Audit Sponsor refers to an Executive Manager. A minimum of one week’s written notice will be given to the auditee prior to the commencement of the audit other than in exceptional circumstances or where directed by the Audit Committee or Audit Coordinator. A copy of all correspondence will be issued to the Audit Coordinator, where appropriate. The date scheduled for the audit may be varied at the request of the auditee, to a mutually convenient date. The audit may not be deferred outside the quarter scheduled in the Annual Plan. Should the timing of the audit be varied from the approved audit plan, this is to be conveyed to the Chair of the Audit Committee, through the Audit Coordinator who may authorise the variation following any consultation deemed necessary and subsequently seek ratification at the next meeting. Timing can only be varied where prevailing circumstances are outside the ordinary course of business. The Internal Audit Provider (the Auditor) shall not commence an audit review before first meeting with the relevant Audit Sponsor and or Line Manager either separately or together. This will be termed the entry interview. The Auditor and the Audit Sponsor shall agree on the timing and scope and boundary of the audit. Any special requirements or considerations should be discussed at this stage. In so doing, the assignment plan will be revised to reflect current circumstances potentially updating the focusing question for the audit. Any major changes to the scope of the audit will be discussed with the Audit Coordinator and ratified by the Audit Committee at the next audit committee meeting.
Conduct of Audits
The Audits shall be conducted in accordance with the Internal Audit Charter and the agreed audit plan. During the audit, liaison shall be maintained between the Auditor and the responsible line manager and, as necessary, with the Audit Sponsor. Any serious/major deficiencies identified during the conduct of the audit are to be raised with the Audit Sponsor at the earliest mutually convenient time.
The Auditor shall use the most appropriate auditing methodology for each audit conducted. Generally, this will involve the use of systems-based methodology. However, circumstances may require the use of a range of complementary techniques. Internal Audit should be aware of changing methodologies and examine innovations to ascertain their applicability to ACMA operations.
Strategic Audit Plan (SAP) Annual Audit Plan (AAP)
The operations of Internal Audit shall be in accordance with the following plans:
The Strategic Audit Plan is a long term (three year) planning document intended to ensure that all major functions, systems and organisational units of ACMA are audited on a regular basis. The Annual Audit Plan is a short term (one year) planning document which schedules the audits to be undertaken on an annual basis in accordance with the SAP. The Auditor is responsible for the preparation of each SAP and AAP and in so doing shall be guided by the Audit Committee and ACMA Senior Executives. The SAP and AAP are to be approved by the Audit Committee. The AAP is to be approved not later than the end of August each year. The Auditor may conduct special (non-scheduled) audits as recommended by the Audit Committee and/or Audit Sponsor and/or ACMA Senior Executive. These will be resourced by reallocating priorities within the AAP (as directed by the Audit Committee) or funded separately.
The Auditor shall conduct audits in a manner which is consistent with the provisions contained in the Internal Audit Charter. In the course of conducting audits, the Auditor shall collect, analyse, interpret and document information to support audit findings and recommendations. The Auditor shall ensure that their field staff are only assigned to audits for which they possess appropriate skills, qualifications and experience. Unless directed by the Audit Committee or member of the ACMA Senior Executive, staff of the Auditor shall not disclose information to any person. All personnel of the Auditor shall sign an annual secrecy declaration of the Auditor’s.
Audit documentation shall be reviewed by senior staff of the Auditor to ensure objectivity and the achievement of the objectives of each audit task undertaken. The Auditor, where possible, shall develop and utilise proforma documents, permanent files, computer databases, spreadsheets and working papers for undertaking audits. All documentation shall be required to be available for reference by the Audit Committee and ANAO for a period of five years after the conclusion of each review (even where the contract passes to another service provider).
Report Preparation and exit meeting
The Auditor shall use its best endeavours to arrange and hold an exit interview at the completion of field work.
The exit interview shall be between the Auditor, the Audit Sponsor and/or the relevant line Manager. A draft report shall be prepared by the Auditor for distribution to the Audit Sponsor within fourteen days of the exit interview. The Audit Sponsor is to respond with comments within fourteen days of receiving the draft report (or if this is not possible some other period agreed between the Auditor and the Audit Sponsor). Comments to the report provided by the Audit Sponsor and/or line manager are to be succinct, and will be included in the final report as ‘management response’. The Auditor will ensure that the management comments observe the following protocols:
commence by stating whether the auditee accepts or disagrees with the finding/recommendation; provides details of actions to be taken; nominates an action officer; and provides an indicative action schedule or proposed implementation timeframe.
Within a further ten days the Auditor will issue a final report which has been signed by a partner in the Auditor’s company and the Audit Sponsor. Copies of the final report shall be provided to the Audit Coordinator and the relevant Audit Sponsor. All reports are to be made available to the ANAO on request.
The Audit Coordinator shall, in conjunction with the Auditor, (a) draw up and (b) maintain a schedule of recommendations indicating agreement or otherwise, the implementation/ corrective action which was taken and when and in what manner it was taken. Where no action has been or will be taken this should be recorded and the reason stated. The Audit Coordinator shall undertake this task in a timely manner or within timeframes the Audit Committee instructs. The line manager shall bring to the attention of the Audit Sponsor any matters requiring attention or decision of the Audit Sponsor as soon as practicable after receipt of the report. The report shall be placed on the agenda for the next available meeting of the Audit Committee. The Audit Committee will continue to monitor the report until it is satisfied that all necessary action required has been completed.
The Audit Coordinator shall conduct follow-up audits to ensure that recommendations have been implemented.
The result of follow-up audits shall be periodically reported to the Audit Committee.
Management of Internal Audits
the Internal Audit function complies with all provisions of the Charter and these Guidelines; the Chair of the Audit Committee is informed of all matters which may impede (or are impeding) the Auditor from fulfilling its purpose under the Charter; the resources of the Auditor are used with maximum efficiency and effectiveness; and the Audit Committee is provided with regular reports on the work of the Auditor at each meeting.
The Auditor shall be responsible for ensuring that:
The Auditor will ensure that an appropriate quality assurance program is maintained to monitor the effectiveness and efficiency of the function.
Audit Coordinator liaison
An Audit Manager and/or Partner from the Auditor will have regular meetings with the Audit Coordinator to discuss: forthcoming assignments; results of follow up audit reviews conducted by the Audit Coordinator; results from recently completed audit assignments; Annual Plan progress, including amendments to the Plan; Audit Committee meetings and liaison; and distribution of audit reports and papers.
Sufficient audit resources will be allocated in the AAP to allow for Audit Coordinator liaison.
Meetings with senior management
Meetings with senior personnel within ACMA, as directed, are an essential part of keeping abreast of emerging issues. These will be undertaken on a regular basis (at least quarterly), and attended by partners from the Auditor.
Audit Committee Meetings
The Auditor will undertake its best endeavours to have one partner in attendance at any Audit Committee meeting. At a minimum, there will always be one partner and one senior manager in attendance.
From time to time, it may be appropriate to have other representatives from the Auditor attend the Audit Committee and present reports. In these circumstances, the number of representatives from the Auditor’s company attending an Audit Committee is not limited. The Audit Coordinator is responsible for coordinating all aspects of the Audit Committee including: distributing Audit Committee papers five working days before the meeting; and maintaining a true and accurate record of the Audit Committee minutes; circulating draft minutes from the meeting for comment, within five days of the date of the meeting and a final copy of the minutes within ten days of the meeting; and co-ordinating all aspects of the Audit Committee including but not limited to: Audit Committee member liaison; preparation and circulation of agenda; maintaining a log of matters arising; coordinating presentations to the Audit Committee by external parties (including the ANAO); and presentation of Implementation of Recommendations Schedule.
The Chair of the Audit Committee will notify the Auditor of upcoming meetings at least four weeks in advance. The Auditor will provide the Audit Coordinator with an Audit Committee paper on internal audit activity to be included in the Audit Committee papers. This will be distributed in a timely manner to enable papers to be distributed at least five days before the meeting. The Auditor’s Audit Committee paper on internal audit activity will include: details of completed internal audit assignments and associated reports; status report on internal audit activity in progress; planned or upcoming internal audit assignments; and any other relevant matters that require the attention of the Audit Committee. report by the Auditor; report by the Audit Coordinator on the follow up of audits; report from external audit (where appropriate); and a category for other business.
The agenda items must include:
The ANAO will, where appropriate, place reliance on internal audit work. The Auditor will liaise on a regular basis with the ANAO and discuss any aspects of work with them.
Performance Measurement shall be undertaken annually on a basis mutually agreed by the Audit Coordinator and the Auditor. The Auditor will prepare performance assessment and discuss with the Audit Coordinator and the Audit Committee. The Audit Coordinator shall distribute a Performance Assessment questionnaire to the Audit Committee, Audit Sponsor and other key ACMA personnel every twelve months. The Audit Coordinator shall consolidate feedback from the questionnaire and provide a written report to the Audit Committee at its next meeting. The Auditor shall have the opportunity to formally comment and discuss the results of the survey with the Audit Coordinator, prior to distribution of the final report.