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2. Mission. The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our country's democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence.

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    1. 1 Strategic plan and budget of the Auditor General of South Africa for 2010 - 2013 Version 1.1 30 October 2009

    2. 2 Mission The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution (SAI) of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector through auditing, thereby building public confidence. This is our reputation promise

    3. 3 Table of contents Strategic Plan and Budget 2010-2013 Audit tariffs Audit directive Way Forward

    4. Page 4 Strategic Plan and Budget

    5. 5 See Word document attachment with targets

    6. Page 6 Audit Tariffs

    7. 7 Recoverable hours

    8. 8 Calculation of AGSA Hourly Tariff Hourly Tariff = (Annual Salary/Annual Recoverable hrs) * mark-up factor AGSA average mark-up factor = 2.2 Utilised 7% salary increase assumption For example: An audit manager with an annual salary of R500000 has a charge out for 09/10 of R824 per hour. Assuming a 7% salary increase for 10/11 an audit manager will earn a salary of R535000 and have a charge out of R884 per hour. This means a fee increase of 7.28% for our auditees.

    9. 9 Calculation of SAICA Hourly Tariff SAICA mark-up factor = 2.86 Aligned recoverable hours to AGSA hours Where existing rate was higher, left at existing rate Where new rate was higher, capped increase at 7% There is a 30% differential between AGSA tariffs and SAICA tariffs For example, if we take an annual salary of R405000 The AGSA rate is calculated as (R405000/1320hours)*2.2 = R675 The SAICA rate is calculated as (R405000/1320hours)*2.86 = R878 So the auditees pay a premium of (R878-R675) = R203 per hour on this band This equates to a premium of 30% (R203/R675)

    10. Page 10 Audit Directive

    11. 11 Broad consultation on audit directive The Directive sets out the audit standards of the AGSA, therefore broad consultation is necessary Environmental scanning: Directive addresses lessons learnt from previous audit cycles, including readiness assessments (consultation/scanning with: auditors, AGSA senior leadership, AGSA technical specialists, NT, CFOs) Technical developments: Directive is aligned to developments in accounting and auditing (consultation with: ASB, NT, SAICA Public Sector Committee, IRBA, AGSA Technical Committee, AGSA EXCO. Also, IFAC and INTOSAI developments are considered) Consultation with SCoAG in terms of s13(1) of the PAA (planned for 16 October 2009)

    12. 12 Key elements in the Directive Applicability: all auditors of publicly funded institutions, including those that the AGSA opts not to audit itself (s4(3) of the PAA) Enforces consultation by Institutions on the appointment of auditors (s25 of PAA) Emphasises that the Audit Directive must be complied with and outlines the consequences of non-compliance Confirms that an opinion will be issued on the financial statements in terms of international auditing standards Elaborates on the AGSA phased approach to the audit of performance information and indicates the key areas of focus to be included in audit reports Confirms that while no opinion is issued on non-compliance, this remains a reportable matter Confirms that Performance Audits are undertaken in terms of INTOSAI standards Confirms that Investigations are undertaken in terms of the AGSA’s own standards and guidelines Specifies the standards applicable to audit related services and to reports on donor funds Explicitly provides details of the AGSA response in terms of International Standards on Auditing to the different accounting frameworks

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