Home' Defence Magazine : Issue 6 2009 Contents 21
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he crucial role that
auditors play in supporting
effective governance has been
recognised and supported with
the creation of a new Chief Audit
executive (CAe) function.
Former Macquarie Bank executive, Geoff
Brown has been appointed to the new position
which will see the CAE assume responsibility for
the internal audit function, which previously rested
with the Inspector General.
The CAE will be supported by the team in
Audit Division – whose work, said Acting Assistant
Secretary Management Audit, David Anderson,
cannot be underestimated.
“We assist the whole of Defence in improving
its organisational performance through the delivery
of an independent and objective review and
advisory service,” Mr Anderson said.
“We assure the Secretary, Chief of the
Defence Force (CDF) and the Chief Executive
Officer of the Defence Materiel Organisation
(DMO) that the financial and operational controls
designed to manage the organisation’s risks are
operating efficiently, effectively and ethically.”
The Audit Division is spread around Australia
with a significant presence in Melbourne and
Brisbane and four Canberra-based directorates, two
of which include specialist areas focusing on financial
compliance and controls, and information technology.
“The majority of audit work that is carried out
is focussed on performance audits with a smaller
number of compliance audits,” Mr Anderson said.
The Audit Work Program (AWP) for 2009-
2010 outlines the proposed performance and
assurance internal audit coverage for this
financial year across Defence.
To decide what needs to be audited, Audit
Division analyses the risk categories identified in
the Defence Enterprise Risk Management (ERM)
Plan determines the priority areas.
“The 2009-2010 AWP was developed using
the 10 enterprise risk categories and 18 key
result areas that were agreed by the Defence
Committee,” Mr Anderson said.
“The Service Chiefs, Group Heads and the
CEO DMO were consulted during the development
of the AWP to identify strategic level areas and
issues of concern, and to define auditable topics.
“Some of the diverse areas we audited as
part of the 2008-2009 AWP include operational
contracts in the Middle East and Afghanistan areas
of operation, the System of Defence Instructions,
and inventory stocktaking processes.
“And, as part of the 2009-2010 AWP we
are auditing the processes and controls around
such diverse topics as land disposals, intellectual
property management, the eradication of asbestos,
governance in the ADF Cadets and the management
of private weapons,” Mr Anderson said.
In addition to this extensive audit work, the
Audit Division also conducts management-initiated
reviews and forensic investigative tasks.
ANAO and Audit Division – an integral relationship
The Audit Division plays a key role in helping the Australian National Audit Office (ANAO) with is
The ANAO is responsible for undertaking audits of the financial statements and the performance
of Australian Government agencies and entities, and it is the Audit Division that coordinates all
An Audit Division Shadow Auditor is also assigned to each ANAO audit to help Groups to identify key
project issues and risks and to facilitate communication. The Shadow Auditor also ensures there is a
positive working informed of any issues or problems that may arise.
Audit Division’s key services to clients
Audit Division assists managers and commanders by:
■ providing assurance on effectiveness and efficiency of systems of internal control helping to
improve the performance of their organisation through the provision of recommendations arising
out of control and operational deficiencies identified during the audit process
■ supporting and assisting management in the development and implementation of risk management
methodologies across their operations, and
■ helping to minimise risk of fraud through the identification of controls weaknesses.
Audit Division to probe good governance
By Leila Daniels
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