Legislation and standards

Constitution Act 1975

Victoria’s Constitution Act 1975 establishes the Auditor-General as an independent officer of Parliament, and contains provisions on the Auditor-General’s appointment, operational independence and tenure. Following amendments passed by the Victorian Parliament in 2003, the government can only change provisions relating to the Auditor-General following a referendum, which protects the independence of the Auditor-General in Victoria.

Audit Act 1994

The Audit Act 1994 establishes the legislative framework governing the ongoing role and functions of the Auditor-General. This Act identifies statutory powers and responsibilities, and authorises the Auditor-General to:

  • conduct annual financial statement audits of public sector agencies
  • conduct performance audits in the public sector to assess the economy, efficiency and effectiveness of the management of public resources
  • examine the use of public grants received by both private and public sector organisations
  • use the organisational structure and resources of the Victorian Auditor-General’s Office to fulfil legislative functions
  • access a broad range of documents under Section 11 of the Act.

The Auditor-General is not able to:

  • question the merits of policy objectives of the government
  • provide an absolute assurance of the truth of agency information, or the effectiveness of internal controls
  • enforce recommendations
  • resolve individual matters of contention.

Integrity and Accountability Legislation Amendment (A Stronger System) Act 2016

This amending Act came into effect on 31 May 2016, following a review of the Audit Act 1994. It provides VAGO with:

  • the power to determine the efficiency, effectiveness and economy of the services and functions delivered through contracts with private or not-for-profit providers  and associated entities through ‘follow-the-dollar’ performance audits
  • expanded information sharing with Victorian integrity bodies and other Auditors-General
  • streamlined consultation with the Public Accounts and Estimates Committee
  • new time frames for agency responses to draft audit specifications
  • stronger restrictions on disclosure of performance audit information
  • the ability to table audit reports when Parliament is not sitting
  • extraterritoriality for audit powers.

Australian Auditing Standards

We conduct financial and performance audits in accordance with Australian Auditing Standards, as required by section 13 of the Audit Act 1994. These standards are set down by the Auditing and Assurance Standards Board and are updated regularly. The standards cover planning, communication, conduct, evidence, quality assurance, delegations and reporting of an audit. They require auditors to design and perform procedures to obtain ‘sufficient and appropriate’ audit evidence, to use as a basis for drawing conclusions and forming an audit opinion. Sufficiency is a measure of the quantity of audit evidence, and whether it is enough to support the audit opinion and conclusions. Appropriateness is a measure of the quality of evidence, which is affected by the relevance and reliability of the information it is based on.