Internal audit should demonstrate its performance and value as part of the department's governance framework. It can do this by delivering on its objectives, communicating meaningful insights, reporting on implementation of audit recommendations, and showing commitment to quality and continuous improvement by establishing, measuring and reporting against performance measures. This builds credibility and trust with the audit committee and management.

For the internal audit function to be effective, it must be able to carry out its responsibilities independently and objectively, without interference. Operational independence ensures that internal audit operates free from conflicts of interest, bias and management influence.

Internal audit is a key pillar of good governance. It provides the audit committee, the Secretary of a department, senior executives and stakeholders with an independent view on whether the department has an appropriate risk and control environment. It also helps promote a strong risk management and compliance culture within a department.

According to the IIA, internal audit helps a department accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, internal controls and governance processes.

Internal audit is intended to be an independent, objective assurance and consulting activity designed to add value and improve an agency's operations. It can be an important part of the internal control framework and help an agency accomplish its objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, internal controls and governance processes.

Ordered to be printed

VICTORIAN GOVERNMENT PRINTER August 2017

PP No 257, Session 2014–17

VAGO undertakes performance audits into the economy, efficiency and effectiveness of public sector agencies and their operations to provide assurance to Parliament and drive public sector improvement. We aim to achieve this by identifying issues and making recommendations to agencies about how to address them. However, our recommendations cannot result in improvements unless they are accepted and enacted by public sector agencies.

Audit committees play a key accountability role in the governance framework of Victorian public sector agencies. While management retains ultimate accountability for operations, audit committees independently review and assess the effectiveness of key aspects of an agency's operations.

The East West Link (EWL) was to be an 18 kilometre cross city road connecting the Eastern Freeway at Hoddle Street to CityLink, the Port of Melbourne precinct and on to the Western Ring Road at Sunshine West, with a range of associated works. It would have been one of the largest transport infrastructure projects ever undertaken in Australia, and significant in terms of its impact, complexity and cost.