Results of 2018 Audits: Technical and Further Education Institutes

Tabled: 30 May 2019

Appendix C. Control issues risk ratings

Figure C1 shows the risk ratings we apply to issues we raise, the management action required, and the expected timeline for the issue to be resolved.

Figure C1
Risk definitions applied to issues reported in audit management letters

Rating

Definition

Management action required

High

The issue represents:

  • a control weakness that could have or is having a major adverse effect on the ability to achieve process objectives and comply with relevant legislation, or
  • a material misstatement in the financial report that is likely to occur.

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:

  • a control weakness that could have or is having a moderate adverse effect on the ability to achieve process objectives and comply with relevant legislation, or
  • a misstatement in the financial report that is not material and has occurred.

Requires management intervention with a detailed action plan implemented within three to six months.

Low

The issue represents:

  • a minor control weakness with minimal but reportable impact on the ability to achieve process objectives and comply with relevant legislation, or
  • a misstatement in the financial report that is likely to occur but is not expected to be material, or
  • an opportunity to improve an existing process or internal control.

Requires management intervention with a detailed action plan implemented within six to 12 months.

Source: VAGO.

Back to Top