The topics covered at the Forum included findings reported in 2014-15 including observations on AASB 1055 reporting; simplified reporting; the 2015-16 consolidated financial statements process and the new consolidation processes; and focus areas of the Financial Statement Audits Reports to Parliament in 2015–16.

The ANAO would like to thank those that attended the Forum and will be considering the potential for similar Forums in the future. If you have any feedback you’d like to see incorporated in future Forums, please do not hesitate to contact: external.relations@anao.gov.au.

The slides presented at the Forum are now available to download (powerpoint file).

A list of questions raised by forum participants and their corresponding answers are available below.

How can I determine how my entity was categorised in regard to our AASB 1055 Budgetary Reporting disclosures?

Entities are encouraged to speak with their ANAO Engagement Executive or audit manager to obtain this information.

In regard to the ANAO’s own AASB 1055 financial statement disclosures, they noted upfront that major variances are only those deemed relevant to an assessment of ANAO’s performance and not focused on only numerical differences. Is this something the ANAO encourages all entities to consider?

Entities should be evaluating what variances are necessary to explain in order to sufficiently inform users of the financial statements of the performance of the entity, including accountability for the resources entrusted to it. This means that entities should not focus solely on explaining variances based on a quantitative threshold and think about what has affected the entity and its performance more broadly.

In regard to the Department of Agriculture and Water Resources’ 2014–15 simplified financial statements, what were the practical steps they took in implementing these?

Key to the successful implementation of simplified disclosures was early engagement and ongoing regular communication between the Department, the ANAO Engagement Executive and audit team. This allowed for issues to be addressed upfront and a “no surprises” approach could be adopted.

Why the push for simplified reporting now – what’s changed?

There is a global trend towards improving financial reporting through entities considering more closely what is useful and meaningful to the readers of financial statements. While this has always been a consideration of applying the accounting standards, more typically a ‘one size fits all’ approach has been adopted in both the public and private sectors. The ANAO and Department of Finance are supportive of entities thinking outside the box and closely evaluating how they present only necessary and useful information in their financial statements. For example, Australia Post’s 2014–15 financial statements removed the static Note 1 and incorporated applicable commentary regarding accounting policies throughout the financial statements.

In regard to the Department of Finance’s proposed “Consolidation Pack”, will they be mandatory for every entity?

Yes. The packs are designed to obtain information from all entities to assist in the consolidation process, while still allowing for individual entities to consider simplification of their own financial statements. These packs will be subject to assurance processes confirming the completeness and accuracy of submissions by both the Department of Finance, as well as the ANAO.

When will the Consolidation Packs be available to entities?

A draft consolidation pack is proposed to be released in March for the purposes of trialling the process. The release of the final pack to all entities is yet to be confirmed.

What is the difference between an entity adopting a corporate bond rate, rather than the Government bond rate, which must be adjusted for at the CFS level versus entities applying different Salary Growth Rates which aren’t adjusted for?

There is no one Salary Growth Rate that is required to be applied to all entities’ employee provisions due to the nature of the entity‐specific assumptions underpinning this rate. The bond rate on the other hand is applied to all government entities as a result of the common environment in which they operate, and as a result any different rates must be adjusted for at the CFS level.

In regard to evaluating audit committees, and in particular the knowledge and expertise of those members, is there training available for newly appointed Audit Committee members?

Neither the ANAO or Department of Finance provide training for Audit Committee members. It was noted the Institute of Internal Auditors provide training to Audit Committee members and further information can be obtained via their website www.iaa.org.au

In regard to upcoming reporting requirements, what is the status of Annual Performance Statements?

The Department of Finance has recently made a submission to the Joint Committee of Public Accounts and Audit (JCPAA) regarding Annual Performance Statements, including a proposed form. The submission can be accessed through the JCPAA current inquiries webpage. Entities are encouraged to view the proposed form and determine how they might present their own performance statements in light of Finance’s submission. The submission notes an expected release of the Annual Report Rule, subject to approval by the JCPAA, from mid to late May 2016.

What is the status of Compliance Reporting – will entities be required to submit a Compliance Report consistent with previous years?

The Department of Finance has indicated a move away from centralised reporting on compliance, and is awaiting a decision by the Minister on this matter. Entities will be informed by the Department of Finance of the new arrangements as soon as it is confirmed. The ANAO’s view is that while entities may no longer be required to report their compliance centrally to the Department of Finance, this does not remove their responsibilities under the Public Governance, Performance and Accountability Act 2013 to maintain processes which identify, monitor and address compliance risks.