Agenda Item No 6

The Vale of Glamorgan Council

 

Audit Committee 19th September 2018

 

Report of the Managing Director

 

The Auditors Responsibilities Relating to Fraud in an Audit of the Financial Statements

Purpose of the Report

  1. To provide the Audit Committee with a copy of the detailed submission of the Council's response to the Wales Audit Office acting as the Council's External Auditor which relates to the requirements as set out in the International Standard for Auditing (UK and Ireland) 240 - The auditor's responsibilities relating to fraud in an audit of financial statements

Recommendation

  1. That Members consider the content of this report and note the information provided.

Reasons for the Recommendations

  1. To ensure compliance with the requirements of the International Standards on Auditing.

Background

  1. Under the International Standard for Auditing 240 (ISA 240), the primary responsibility for preventing and detecting fraud rests with both management and "those charged with governance" which for the Vale is the County Council. This includes fraud that could impact on the accuracy of the annual accounts

Relevant Issues and Options

  1. The ISA 240 requires the Council's External Auditors to obtain an understanding of how the Council exercises oversight of management's processes for identifying and responding to the risks of fraud and the internal controls established to mitigate them. Attached at Appendix A is the Council's responses to the specific enquires made by the External Auditor in order for them to obtain evidence of how management and those charged with governance are discharging their responsibilities.

Resource Implications (Financial and Employment)

  1. The External Auditor's responsibility to consider fraud in an audit of the financial statements are set out in the International Standard on Auditing (ISA).

Sustainability and Climate Change implications

  1.      There are no immediate sustainability or climate change implications associated with this report.           

Legal Implications (to Include Human Rights Implications)

  1. The ISA 240 requires the external auditor to obtain an understanding of how the Council exercises oversight of management's processes for identifying and responding to the risks of fraud and the internal controls established to mitigate them.

Crime and Disorder Implications

  1. None as a direct consequence of this report.

Equal Opportunities Implications (to include Welsh Language issues)

  1. None as a direct consequence of this report.

Corporate/Service Objectives

  1. The work of both internal and external audit is intended to assist in the achievement of all corporate and service objectives.

Policy Framework and Budget

  1. The proposals in this report are in accordance with the policy framework and budget.

Consultation (including Ward Member Consultation)

  1. None at this stage

Relevant Scrutiny Committee

  1. Corporate Performance and Resources

Background Papers

None

Contact Officer

Carys Lord - Head of Finance & Section 151 Officer

Officers Consulted

Engagement Lead - Wales Audit Office

Responsible Officer:

Rob Thomas - Managing Director