Public Audit Committee

Meeting date: Wednesday, October 6, 2010

Official Report 440KB pdf

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“Draft Code of Audit Practice”

I am looking at the time. Could the item on the draft code be held over?

It would be helpful if it could be dealt with quickly today, because we hope to finalise the code with the Accounts Commission next week.

Okay. We will deal with it quickly.

Audit Scotland appoints its auditors to a wide range of public bodies every five years, at which point we also revise our code of audit practice, which is a key part of the framework for the conduct of those audits. We have been consulting stakeholders and audited bodies on revisions to the code over the past three months. The main purpose of the code is to provide a framework for the conduct of audits. The code stresses the similarities in the conduct of audits across the range of public sector bodies, rather than the differences between the different parts of the public sector. It is a principles-based code, which stresses some of the key principles for public audit: that auditors should be independent of the bodies that they are auditing; that the audits should be wide in scope, looking at governance as well as the audit of the financial statements; and in particular that auditors should work in partnership with not only each other and Audit Scotland, but the other scrutiny bodies across Scotland.

The consultation on which we engaged produced about 40 responses, virtually all of which were highly supportive of where we were going. There were very few suggestions for either additions to what we do or, in these straitened times, for reductions.

By issuing the code, we are aiming to achieve a very high and consistent standard of audit across all the bodies that we audit. We bring the code to you for information but also to give you, as a key stakeholder, the opportunity to make any comments that you wish to make as we go through the revisions.

Thank you. I know that committee members would want to commend the principles that are outlined in the code. I think that we would want to endorse the code, because what has been articulated is important for carrying out the audit function in Scotland and for giving the public confidence that organisations are working properly and that accounts are being scrutinised and used appropriately. The work that you have done on that is very welcome.

Did the consultees express any view about the role for audit at the follow-up, verification stage, which we have mentioned on numerous occasions in the committee? It seems to us that when an audit function makes its recommendations, it rarely revisits them in detail. Was any view taken about there being more of a role for the audit function at that end of the process?

From the responses that we got, there was no specific view on that, although we have been doing work in that area over the past couple of years in particular. It might be that what we have been doing has already addressed any concerns that were there.

Thank you. I commend the revised code to all and sundry.

Do members agree to hold over agenda item 5?

Members indicated agreement.

12:39 Meeting continued in private until 13:00.