The National Greenhouse and Energy Reporting (Audit) Determination 2009 (Audit Determination) sets out requirements for all audit team leaders who conduct Part 6 audits. In addition, the
National Greenhouse and Energy Reporting Act 2007 (NGER Act), and the National Greenhouse and Energy Reporting Regulations 2008 (NGER Regulations), also impose requirements on audit team leaders for Part 6 audits (an ERF audit; a greenhouse and energy audit; a safeguard audit).
Audit team leaders are individually registered as Category 2 greenhouse and energy auditors and, for Part 6 audits, they are personally appointed. For an audit team leader to be appointed under the NGER Act, there must be written authority from the entity being audited which clearly names the audit team leader. This can be referred to as an instrument of appointment.
If a change occurs to the audit team leader, the audited body must also verify this in writing. Similarly, it is always open to the audited body to appoint an alternative audit team leader.
Where a registered Category 2 greenhouse and energy auditor is appointed by an audited body to conduct an audit, they cannot unilaterally appoint an alternative audit team leader. They are, however, able to engage subcontracted audit team members and peer reviewers to perform these roles for Part 6 audits.
This is not a new agency policy—it is a legislative requirement.
As an audit team leader, you are accountable for the conduct of an audit, and the quality of the work papers and audit file. You must ensure that your duties and responsibilities are performed personally and professionally.
The accountability does not sit with any other person or firm that has been engaged as an audit team member. Nor does the accountability shift to another person unless there is a clear instrument of appointment by the audited body.
The Clean Energy Regulator is aware that some organisations and audit firms are subcontracting with audit team leaders to conduct audits on their behalf. In some cases, this subcontracting arrangement may not be supported by a clear instrument of appointment. Where this occurs there may be confusion about who has accountability for the audit which exposes all parties to unnecessary risk.
The Clean Energy Regulator has identified a number of instances where the subcontracting arrangements were inadequate and the audit team leader could not demonstrate full control of the audit and compliance with the NGER Audit Determination. The Regulator has taken compliance management action as a result.
Regardless of how you are appointed by an audited body to perform a Part 6 audit, as an audit team leader you must consider all circumstances where conflict of interest might arise and adhere to the Audit Determination. You must have
full control of the audit, which includes:
You must also ensure that:
The Clean Energy Regulator prefers all Category 2 auditors to use their own quality control system or that of their firm. However, you may choose to use a quality control system that is not your own or that of your firm. For example, you may choose to use the system belonging to the coordinating firm that helped to organise your appointment by the audited body. If the agreed system is not your own, you should satisfy yourself that the system meets the requirements of auditing standard ASQM 1
Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information or ASQM 2 Engagement Quality Reviews. You must also ensure you can provide documentation of the system to the Clean Energy Regulator, if requested.
Whatever quality control system you use, it must meet the requirements imposed by the audit standards and you will be held accountable for this.
The Clean Energy Regulator undertakes regular inspections of registered greenhouse and energy auditors. Compliance with this guidance will be a specific focus of these inspections. Any non-compliance with the Audit Determination, or other relevant legislation, may result in regulatory action against you.
documentasset:Guidance: Appointment as an audit team leader
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