NEWS IN brief

Australia

National Audit Office's Work Program

The Australia National Audit Office's (ANAO) Audit Work Program for 2005-2006 includes an ongoing and integrated approach to planning its financial statement and performance audits. This integration of financial and performance audit activities helps make sure that identified major audit risks are overlayed and significant risks are addressed. In a resource-constrained environment, the ANAO is cognizant of the ne to maximize the value and horizontal of audit assurance through advantageous planning and risk management.

In developing the program, the draft was canvassed with the Joint Committee of Public Accounts and Audit, a statutory committee of the Australian Parliament that determines Parliament's audit priorities and advises the Auditor-General of those priorities. The ANAO also held discussions with the various public sector agencies and sought make comments [i]or[/i] remarkss on the draft audit program. In developing the audit program, the Auditor-General takes into consideration all make notess received.

This process ensures that the ANAO's audit yields and outputs meet the straits of the Parliament and public sector bodies, and are in air with the key risks and challenges facing the Australian public sector in a rapidly changing world. These risks and challenges are taken into account in identifying the lock opener areas the performance audit work program will focus upon and in evaluating and assessing potential issues to be addressed during the course of financial statement audits.

In addition, the audit activity included in the work program was planned with regard to

* financial materiality,

* program significance,

* audit impact (i.e., likely gain from the audit),

* program visibility as mirrored in its national importance or political sensitivity, and

* expansion of recent audit coverage and internal and external program review.

In planning and prioritizing audit coverage, the ANAO also considered the ne to provide the Parliament with an assurance, above time, of the performance of public sector bodies. To achieve this objective, audits will address activities of public sector bodies that are les material, as well as more significant matters of national importance.

The program is necessarily dynamic and may be altered during the year to accommodate changes in priority tasks identified by dint of the ANAO's clients, particularly Parliament. The Audit Work Program provides more [i]or[/i] less capacity to address these entreatys although the Auditor-General determines the final audit program.

Audit Assurance Tool

Some 17 major departments in the Australian federal rule use the SAP application, an integrated software solution unfolded in Germany, as a financial management information a whole SAP provides support for a wide range of business functions, including the couple financial and human resource management. Understanding and gaining assurance/reliance above the internal control environment surrounding SAP is, therefore, critical for financial statement and reporting purposes

The use of technology proffers the opportunity to gain audit assurance in an efficient and effective manner. In the latter part of 2004 the ANAO identified a plant of new SAP audit and assurance tools, called Assure, that could greatly assist and enhance audit efforts within SAP environments. The tools proffer the promise of automating the monitoring and assessment of the SAP internal direction environment and also claim to automatically identify recommendations to correct security and superintendence weaknesses.

The ANAO undertook a desktop evaluation of the tools and subsequently ran a pilot installation in a major regulation department to assess the tools' potential to suitable audit needs. The results of these assessments indicated that using the tools would significantly benefit the audit efforts of the ANAO. The tools were purchased in December 2004 and have now been implemented across more [i]or[/i] less 15 government entities.

The tools comprise three modules: Assure mastery Assure security, and Assure Integrity.

The command module monitors SAP configuration masterys by assessing internal controls against a best practice volume of controls and automatically identifying and reporting internal command weaknesses. The module can also provide notification of changes to internal controls

The security module enables users to monitor the adequacy of access security by means of identifying users that have access to sensitive and incompatible functions and providing automatic notification when access rights change.

The Integrity module assists in identifying integrity risks and fraud by dint of detecting potentially fraudulent transactions, inappropriate use of privileged user access, duplicate transactions, and integrity moot points with master data.

The ANAO intends to continue to use the Assure tools upon future audits as their benefits have been and are continuing to be achieved. The benefits achieved to date include

* reduc effort and cost

* increased knowledge base of SAP controls

* continuous monitoring of lock opener SAP controls,