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The three-party relationship

 

The purpose of an audit is to provide the Clean Energy Regulator with independent assurance or verification of the information that the audited body has reported to the Clean Energy Regulator, or of other aspects of compliance with the legislation underpinning the various schemes administered by the Clean Energy Regulator.

To provide independent assurance or verification, a three-party relationship must exist between the Clean Energy Regulator, the audited body and the audit team leader, where:

  • the Clean Energy Regulator is the intended user of the matters to be subjected to assurance or verification
  • the audited body is responsible for reporting in compliance with the legislation governing the schemes administered by the Clean Energy Regulator, and
  • the audit team leader is responsible for:
    • independently assessing the matter to be audited against the criteria and expressing an assurance conclusion following their assessment, or
    • performing verification engagement procedures in line with the verification engagement terms.

It is important to note the circumstances surrounding the relationship between the Clean Energy Regulator, audited body and the audit team leader may be different where the engagement has arisen because:

  • the Clean Energy Regulator has required the audited body to seek an audit for compliance purposes
  • the Clean Energy Regulator has appointed the audit team leader on the basis of a risk management approach, or
  • the audited body has sought the audit voluntarily.

If the audited body has sought the audit voluntarily, their directors may take the place of the Clean Energy Regulator as the intended users of the information, shown in the three-party relationship diagram below.

Figure shows the three-party relationship as described above.

Figure 1 — Three-party relationship

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