What is auditing?
|Auditing has a long
Auditing has a long history. As long as there
has been trade and bureaucracy, there has been auditing.
Checking an account—Auditing is getting someone
who is separate or independent to check something, for example,
examining records or accounts to check their accuracy.
The word auditing literally means to listen, and so auditors
listen to an account—or record of transactions, trades, decisions,
etc.—to check and vouch for its truthfulness. Auditors produce an
opinion on whether they think the account is fair.
To this day, this is still the essence of auditing, in both the
public and private sectors. Financial audits check whether the
financial statements fairly represent the financial position of an
entity. Performance audits check whether what was committed to has
been done, and been done well.
Changed nature of auditing—In the 163-year
history of VAGO, the approach to auditing has evolved. Financial
auditing has become risk-based. Performance auditing emerged from
this practice. Auditors also identify opportunities for improvement
and examples of better practice.
|Independence is critical to
Importance of independence—For all this to
work, the auditor must be independent. Auditors can’t expect, or be
seen to expect, any favour or recrimination from either the person
entrusting or the person entrusted. The Victorian Auditor-General’s
independence is enshrined in the Victorian Constitution, and this
can only be changed by a referendum.
Last updated on 13/07/2015