Interim Audit Conclusions

The results of the interim phase of the audit for entities covered in the interim report indicated that the effectiveness of control activities over business and accounting processes have generally been maintained at a reasonable level, although the total numbers of moderate audit findings increased in 2005–2006 (excluding Defence and DMO). The audit findings suggested that entities need to pay more attention to the controls underpinning their financial management frameworks, particularly in the areas of business continuity and information systems.

A number of issues, which influence our ability to provide positive assurance about an entity’s internal control environment, were also identified in this year’s interim phase. These issues included:

  • shortcomings in the management of compliance with financial legislation;
  • issues relating to arrangements for entities to work collaboratively on a Whole-of-Government basis;
  • the level of integration of risk management with corporate planning and budgeting;
  • the level of development of a business continuity framework and implementation of disaster recovery plans and processes;
  • weaknesses in fraud control planning and mechanisms;
  • concerns over control self assessment practices;
  • the adoption of the Australian Equivalent of International Financial Reporting Standards in 2005–2006; and
  • other significant issues that are applicable to a number of entities include the complexities inherent in accounting for estimates and the tight reporting deadlines for Australian Government entities.