Results of 2016–17 Audits: Local Government
Appendix D. Management letter risk ratings
Figure D1 shows the risk ratings applied to management letter issues raised during a financial audit.
Figure D1
Definitions of risk ratings for issues reported in audit management letters
Rating |
Definition |
Management action required |
---|---|---|
Extreme |
The issue represents:
|
Requires immediate management intervention with a detailed action plan to be implemented within one month. Requires executive management to correct the material misstatement in the financial report as a matter of urgency to avoid a modified audit opinion. |
High |
The issue represents:
|
Requires prompt management intervention with a detailed action plan implemented within two months. Requires executive management to correct the material misstatement in the financial report to avoid a modified audit opinion. |
Medium |
The issue represents:
|
Requires management intervention with a detailed action plan implemented within three to six months. |
Low |
The issue represents:
|
Requires management intervention with a detailed action plan implemented within six to 12 months. |
Source: VAGO.