Who we audit
Our main work is to perform audits of the financial statements of SA Government entities. We audit around 170
SA Government entities, including government departments, statutory authorities, public corporations and universities. The Public Finance and Audit Act 1987 defines what a public entity is.
Our mandate
The Act establishes the Auditor-General’s mandate for both state and local government entities and prescribes the financial reporting obligations of the Treasurer and public sector entities. It also gives us the power to request documentation to perform our audits.
Our financial audits
We audit the financial statements of SA Government agencies every year in line with Australian accounting standards, legislation and Treasurer’s Instructions. We provide a reasonable level of assurance that these financial statement reports are free from material misstatements. This is given in the form of an Independent Auditor’s Report that gives an opinion on whether the financial report gives a true and fair view of the financial position and performance of the agency.
We apply a risk-based approach to these audits and design our procedures to address these risks. We consider the internal controls that the agency has put in place to support the proper processing of transactions. We examine a sample of evidence supporting the financial report’s amounts and disclosures. We evaluate the accounting policies and significant accounting estimates, and consider its compliance with legislative requirements, including the Treasurer’s Instructions.
While our financial audits mostly relate to general purpose financial reports, we also perform other audits like Commonwealth certificates and special purpose financial statements.
The outcomes of these audits are reported in our annual reports to Parliament. The larger, more significant audits are normally reported in our Annual Report to Parliament and all other agencies are reported in an update to this report which is published later.
Extended reviews
Extended audits build on the annual financial audits. They provide insight on good practice, control weaknesses and risk exposures that all agencies should consider in managing their business.
We normally report on these extended reviews in our Annual Report to Parliament.
Controls opinion
When providing our opinion on the collective financial controls exercised by the Treasurer and agencies, we consider whether these controls for specific areas are sufficient to provide reasonable assurance that financial transactions were conducted properly and in line with law.
This opinion is important because sound internal controls enable the delivery of reliable, accurate and timely external and internal reporting. Poor controls hinder achieving objectives, legal compliance, and increases the risk of fraud.
We cover those controls over areas we consider are material to the collective operations of SA Government agencies. We consider materiality from a quantitative and qualitative perspective and target reviews of areas that we believe are of interest to Parliament and the public.
In performing our work for this opinion, we use criteria based on laws, regulations, instructions (such as Treasurer’s Instructions) and agency policies, to assess whether controls are consistent with established standards of financial management practice and behaviour.
Assessing what is reasonable is a matter of judgement and circumstance given the facts, evolving practices, expectations and behaviours. Our audits of controls are based on principles of public accountability, integrity, financial probity and propriety, discharging responsibilities within the letter and spirit of the law, and value for money. They are inherent values and essentially do not change over time. However, there is still a significant amount of judgement involved, and auditors and management will sometimes disagree.
We report our annual controls opinion findings in Part B of our Annual Report to Parliament.
How we work with agencies
We actively engage with our SA Government clients before and during an audit and discuss significant findings with their representatives. To ensure transparency and procedural fairness we provide our clients with written advice about our findings and recommendations and invite the client to respond to these before publishing our reports.
Regular and open two-way communication is critical for an efficient and effective audit. It enables an open relationship between both parties to collaborate on issues arising in the audit.
An engagement leader and manager will oversee the audit. They will meet with the agency early in the audit to establish a positive and open relationships.
We communicate by:
- meeting with senior management at the start of the audit to talk about its arrangements, scope and reporting time frames. We will arrange meetings with agency staff as needed in the audit’s planning, conduct and reporting phases
- attending audit committee meetings (or equivalent) when appropriate
- issuing letters that outline the audit’s engagement process, strategy outcomes and closing
- requesting further information as required for the audit through official correspondence.
Our work involves:
- auditing financial statements – examining the financial statements of SA Government agencies to assess whether they are accurate and comply with accounting standards and relevant laws
- assessing internal controls – reviewing the systems and processes agencies use to manage public money, ensuring that controls are in place to prevent errors, waste, or fraud
- ensuring compliance – checking that agencies are following legislation, regulations, and policies, particularly when spending taxpayer funds
- reporting findings to Parliament – preparing formal reports on their findings, which are tabled in Parliament. These reports help the SA Government Ministers and agency staff, and the public understand how well agencies are managing public resources
- recommending improvements – where weaknesses are found, our auditors make recommendations to help agencies improve their financial management, risk oversight and operational efficiency.
Before we report our findings to Parliament, we perform a robust procedural fairness process to confirm the factual accuracy of them. This process includes:
- providing draft findings to the agency’s nominated staff to review before meeting with them
- discussing the factual accuracy of our findings
- attending meetings with leadership and audit committees (or equivalent) to respond to questions about our findings
- providing draft report commentary to the agency’s nominated staff for review before we finalise the report to Parliament.
Where there are audit delays or when significant matters arise, we will relate with the agency's senior leadership, particularly in finance, to quickly resolve the matter.
The program is delivered by about 100 of our staff and a small number of external contractors.
What information we may need
For us to effectively perform our audit, we will request a large volume of documents as evidence. It is sometimes necessary to request documents that were provided to us previously so that we can confirm that things have not changed.
We will work with the agency to securely transfer this information in a way that works best.
These are some of the types of information we may need. It will vary depending on the audit’s size, complexity and risks. It is a guide and not an exhaustive list.
