The Audit process
The Victorian Auditor-General’s Office (VAGO) conducts financial
and performance audits as required by section 13 of the Audit
Act 1994 (the Act).
Types of audits
Financial statement audits
provide independent assurances to Parliament and the community that
the information contained in the financial statements of public
sector entities is presented fairly in accordance with Australian
accounting standards and applicable legislation.
A performance audit is an
audit which evaluates whether an organisation or government program
is achieving its objectives effectively, and doing so economically
and efficiently, and in compliance with all relevant
How is an audit conducted?
Financial statement audits
are undertaken on around 550 public sector entities each
year. Around half of these audits are undertaken by our own
staff, and the remainder are undertaken by audit service providers
following a process of contestability overseen by the
As the Auditor-General is the principal
auditor of all public sector entities, quality assurance reviews
are undertaken by office staff on all audit work before issuing an
audit opinion on the financial statements of public agencies.
Performance audits extend
beyond the examination of the financial affairs and transactions of
a government agency to encompass wider management issues of
significance to the community. The performance audit process
begins with the planning phase which identifies the issues to be
examined, timing, objectives, approach to be used and the resources
The next stage involves the evidence
gathering; encompassing examination and evaluation of information,
the development of suggestions and formulation of
conclusions. The results of each audit are discussed with,
and formally communicated to, senior management of audited
organisations. The audit process culminates in the Auditor-General
presenting a report on the audit to Parliament.
More information on how audits are conducted
can be found in our Audit Practice
Statement and our Performance Audit
What is audit evidence?
For financial audits, audit evidence includes information from
accounting records used to prepare the report and other relevant
information. Accounting records generally include data from
accounting entries and supporting documents. These include cheques
and details of electronic fund transfers, invoices, contracts,
general and subsidiary ledgers, and journal entries. Work sheets
and spreadsheets supporting cost allocations, computations,
reconciliations and disclosures are also examples.
For performance audits, audit evidence gathered is usually
broader than that obtained for the audit of a financial report.
Some examples include strategic plans, tender documents, business
cases, Cabinet submissions, consultant’s reports, legal opinions
and contracts with private providers. These documents can be
accessed even if they are in draft form or subject to privacy
However, persuasive audit evidence must have the same
characteristics whether it is obtained as part of a financial or
performance audit. That is, the evidence must be sufficient and
appropriate. Audit evidence is cumulative and is also gathered to
corroborate management representations.
More information can be found in our Audit Evidence Brochure.
What powers does the Auditor-General have to obtain audit
The Auditor-General has broad powers under the Act to access
information necessary to perform audits. Under section 12 of
the Act, the Auditor-General or an authorised representative can
access information that is otherwise subject to secrecy or other
disclosure restrictions, such as Cabinet documents.
If there is lack of cooperation by someone representing an
entity subject to audit, under section 11 of the Act, the
Auditor-General can compel individuals to provide information and
to perform a search for any documents in the possession, custody or
control of any authority.
The Auditor-General rarely uses the powers governed by section
11 as authorities usually cooperate with requests for
More information about section 11 of