Directors review of Financial Accounts and External Auditor

Today, the AFR, the Chairman of ASIC, Mr Rod Medcraft made the following comments :

“Mr Medcraft put the onus on directors to contribute to audit quality by ensuring auditors receive reasonable fees and that auditor independence is protected. Price gouging is rampant in the industry, surpassing 2008 levels in the wake of the financial crisis.

(see http://www.afr.com/p/national/boards_must_drill_auditors_asic_8BSbDG724pNPUda4WWbysL – subscription required).

It is important that Directors (often through their Board Audit and Risk Subcommittee) have an active engagement in the tender for External Audit Services, approval of the annual Engagement Letter, review the financial accounts with the External Auditor and finally review their performance.

To assist directors with these processes, we have provided some documents that have been based on various books and material available, please click here to be taken to the page.

An effective external audit process required good and effective oversight by the Directors often through an engaged and active Board Audit (and Risk) Committee.

 

The missing issue: Ethics

The tragic suicide of the UK nurse who answered the 2DayFM radio show prank call has reverberated around the world.

As we have moved into the world of social media, we are now seeing a new level of abuse: witness the instant reaction of people hurling abuse at Mel Greig and Michael Christian, the two perpetrators of the prank.

The media has meanwhile raced to respond to the crisis; – maybe as an attempt to stall  moves by governments to reduce the media’s right to “self-regulation” and to shore up what they perceive as  the freedom of the press.

Over the last couple of days multiple journalists and commentators have expressed their opinions regarding both the prank call and its fallout. Continue reading

Does Corruption in the Public Sector and Resulting ICAC Investigation Decrease Effective Management?

ICAC released a report into its investigation into corruption by an IT Manager through recruitment at the University of Sydney.  ICAC made 7 recommendations, however a number of them, in my opinion the recommendations are less than optimal.

A full copy of the ICAC report released on 24 October 2012 can be found at http://www.icac.nsw.gov.au/investigations/past-investigations/article/4167.

Continue reading

Credit cards: the smarter approach

If there is one good thing to emerge from the Craig Thomson/HSU debacle – and surely every cloud has a sliver of silver lining – it is that a bright light has been focussed on the area of credit card control.

There are sound and legitimate reasons for organisations providing key personnel with credit cards which I strongly support: they offer flexibility and purchasing agility; can streamline the purchase of relatively inexpensive products and service; and, improve the purchase-to-pay cycles. At the same time credit cards offer organisations a clear audit trail of who bought what and when. Continue reading

Backward Guide on Best Practice for Australian Commonwealth Public Sector Audit Committees

Australian National Audit Office – Public Sector Audit Committees – Independent Assurance and Advice for Chief Executives and Boards – August 2011 – Best Practice Guide.

On 31 August 2011 the Australian National Audit Office (the office of the Australian Commonwealth Auditor-General) released its latest best practice guide for Audit Committees in the Commonwealth Public Sector.

Given the advancement in other public sector jurisdictions in Australia, and significant improvements in the private sector, this is an exceptionally disappointing body of work and may not lead to the improvement in governance in the Australian Commonwealth Public Sector. I am disappointed that the Commonwealth Auditor-General has not provided effective leadership in the Commonwealth in this area. Continue reading