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• 5.6.1 Reassess materiality and engagement risks
• 5.6.2 Assess subsequent events
• 5.6.3 Prepare a summary of uncorrected errors
• 5.6.4 Obtain management representation

Figure 12 — The assurance engagement process: Reporting

Once the auditor has performed the various assurance procedures as outlined in the assurance engagement plan, it is time to assess the evidence gathered from the testing performed.

Guidance is given on each of the key elements of the performing stage below.

5.6.1 Reassess materiality and engagement risks

The auditor must assess and document whether the materiality and assessment of engagement risks made in the planning stage are still appropriate in light of the evidence gathered during the performing stage.

Where new risks, or modifications to the assessment of identified risks, are identified the auditor must consider how this impacts the level of work performed—where the risk of misstatement is assessed as having increased, the auditor must consider whether the procedures performed are sufficient, and if not perform additional procedures.

The audit team leader must use their professional judgement to assess whether the procedures performed and evidence obtained is sufficient to support the assurance conclusion to be expressed in the assurance engagement report.

If the audit team leader’s assessment of materiality is reassessed and the threshold is lowered, the auditor must then consider the impact on the level of work performed—a lower level of materiality may require the auditor to perform additional procedures to support the assurance conclusion.

5.6.2 Assess subsequent events

Subsequent events are events that occur between the date of issue of the reported data and the date of the audit team leader issuing the assurance engagement report.

For the avoidance of doubt, the term ‘subsequent events’ in this guidance applies only to the period until the assurance engagement report is issued.

The audit team leader must consider subsequent events prior to finalising the assurance engagement report, to check that:

• the assurance engagement report covers the latest information authorised by the audited body (if the audit is occurring before the greenhouse and energy information has been submitted to the Clean Energy Regulator, there may be differences between the first greenhouse and energy information given to the auditor and the final greenhouse and energy information)
• compliance with the relevant legislation is achieved during the reporting period, and
• no events have occurred between the balance date and the date of issue of the assurance engagement report which could cause a material misstatement in the reported information.

By performing subsequent events procedures, the audit team leader is therefore making sure that they are providing their assurance engagement report on the final greenhouse and energy information and that they are apprised of all relevant information, events and circumstances that could impact their assurance engagement report.

Subsequent events procedures typically consist of performing enquiries with senior management of the audited body to determine whether there have been any changes or updates since the time of completing the assurance procedures. The results of enquiries performed must be corroborated, for example, by obtaining the final authorised greenhouse and energy information and enquiries with site level staff to verify the information received from management.

Subsequent events can be grouped into two types of events:

• Events that provide evidence of conditions that existed at the date of issue of the reported data. For example, obtaining new information on a decision by the Clean Energy Regulator regarding the audited body’s method of emissions calculation, which would impact the method of preparing the reported information. If this information leads to a revision in the reported greenhouse and energy information, the final greenhouse and energy report must be adjusted accordingly, and
• Events indicative of conditions that arose after the date of issue of the reported data. For example, new information which came to light about missing or incorrect data after the time of issuing the reported data, which would cause changes to the reported data. This would not ordinarily become an adjustment to the reported greenhouse and energy information, unless the changes required would be material to the reported data.

In each case, the extent of the audit team leader’s consideration of the subsequent events is dependent on the potential for such events to affect the subject matter and the appropriateness of the audit team leader conclusions as expressed in the assurance engagement report.

Materiality is a key concern for the auditor in making this assessment. If the auditor deems that a subsequent event is likely to be material, adjustments must be made to the final greenhouse and energy report prior to the assurance engagement report being signed.

5.6.3 Prepare a summary of uncorrected errors

The auditor must prepare a summary of errors noted during the assurance engagement that have not been corrected in the final greenhouse and energy report—this is the summary of uncorrected errors.

Refer to section 5.3.5 of this handbook for further guidance on how the auditor should set and communicate to management the level of error above which items are included in the summary of uncorrected errors.

Where material uncorrected findings exist (either individually, or in aggregate), the auditor should require the audited body to process adjustments to the final greenhouse and energy report, or consider whether it is appropriate to issue a qualified or adverse conclusion. The auditor must then compare the impact of the aggregate uncorrected findings with the defined materiality, and consider the impact for the assurance engagement report.

5.6.4 Obtain management representation

Prior to signing and dating the assurance engagement report, the audit team leader must seek written representation from the audited body. This representation holds management responsible for the information they have provided, the implementation of adequate internal controls and any information they haven’t provided that is relevant to the assurance engagement.

The assurance engagement forms part of the audit team leader’s assurance evidence. In addition to the management representation requirements of the NGER Audit Determination the audited body’s representation must include:

• acknowledgement of responsibility for preparing the matter to be audited in accordance with their own defined criteria
• confirming that all supporting documentation and information with respect to the assurance engagement has been made available to the auditor, and
• additional specific representations as appropriate (for example, on key areas of management judgement in preparing the subject matter).

The management representation letter must be signed and dated on the same day as the audit team leader signs the assurance engagement report, as a control to make sure that the management representation letter and assurance engagement report cover the same criteria and subject matter.

The management representation letter must also state that information provided throughout the engagement may be required when the Clean Energy Regulator conducts a periodic formal review or inspection of a greenhouse and energy auditor’s registration, under subdivisions 6.5.3 or 6.5.6 of the NGER Regulations.

A template for the management representation letter is included at the end of this handbook.