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ACHIEVING EARLIER SIGN-OFF Neville I’Anson Director, Financial Audit Reporting Framework - Deadlines * For year ending 30 June 2011 will be 15 August ** For year ending 30 June 2011 will be 30 September Present Reporting Trends CBA financial report and audit report signed 13 August 2008

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achieving earlier sign off

ACHIEVING EARLIER SIGN-OFF

Neville I’Anson

Director, Financial Audit

reporting framework deadlines
Reporting Framework - Deadlines

* For year ending 30 June 2011 will be 15 August

** For year ending 30 June 2011 will be 30 September

present reporting trends
Present Reporting Trends
  • CBA financial report and audit report signed 13 August 2008
  • Telstra financial report and audit report signed 13 August 2008
  • ANAO give audit clearance to Commonwealth Departments prior to 31 July
  • Many Tasmanian GBEs and SOCs seeking audit clearance from TAO prior to signing financial reports in August
how to improve the process
How to Improve the Process
  • Keep boards and audit committees up-to-date on contentious issues
  • Resolve key decisions with A-G or delegate before year-end
  • Undertake revaluations and actuarial reviews early
  • Ensure monthly reconciliations carried out on a timely basis
improve the process cont
Improve the Process (cont.)
  • Ensure early review of asset useful lives and depreciation rates
  • Ensure timely information from external service providers
  • Ensure timely lead sheets with explanation of major movements
  • Ensure time consuming tasks commenced well before year-end
tao general approach
TAO General Approach
  • Substantiate reported balances at end of May or earlier, i.e. examine reconciliations
  • Obtain confirmations where necessary, e.g. cash, investments, borrowings
  • Reconcile and review account movements from May to year-end
  • Examine significant or unusual transactions during June
example receivables
Example - Receivables
  • Reconcile subsidiary ledger to G/L as at 31 May
  • Ensure evidence of QA review
  • Prepare aged analysis of outstanding balances
  • Provide comments for debts outstanding over 90 days
  • Write-off any bad debts
tao approach receivables
TAO Approach - Receivables
  • Verify 31 May reconciliation
  • Sight evidence of QA review
  • Review aged analysis of balances
  • Review debts over 90 days
  • Sight approvals for debt write-off
  • Confirm a selection of balances
  • Review roll forward to 30 June
  • Review large and unusual June transactions
example ppe revaluation
Example – PPE - Revaluation
  • Complete revaluations before 31 May
  • Obtain copy of Valuer’s documentation
  • If in-house – prepare representation letter from engineer or other expert
  • Ensure Board or executive approval is documented
  • Provide copies of supporting journals
tao approach revaluations
TAO Approach –Revaluations
  • Review documentation supporting revised valuation
  • Reconcile adjustments to carrying amounts and review journals
  • Sight evidence of QA on journals
  • Sight evidence of acceptance of revaluation by Board or executives
lead sheets
Lead Sheets
  • Lead sheets are the reconciliation of ledger account balances to financial statement line items for both the current and the previous year.
  • They allow identification and validation of account movements from one year to the other
  • They are a QA process not an audit process
  • Must be available early to facilitate the early completion of the audit
summary
Summary
  • Early completion of asset revaluations and actuarial reviews
  • Early completion of model accounts and draft notes for audit clearance
  • Monthly reconciliation of subsidiary registers to the G/L
  • Early completion of lead sheets with explanations for significant movements
  • Monthly accrual accounts?
summary cont
Summary (cont.)
  • QAO - Better Practice Guide

‘Strategies for earlier financial statement preparation’

Web Site: www.qao.qld.gov.au