Introduction

Good morning, my name is Grant Hehir, I am the Auditor-General for Australia.

I’d like to begin by acknowledging the Traditional Owners of the land on which we meet today. I would also like to pay my respects to Elders past and present. I would also like to thank Aunty Violet Sheridan for welcoming all participants for IMPACT 2023 to Ngunnawal Country.

On behalf of the Australasian Council of Auditors-General, the Auditor-General of the Australian Capital Territory, Mr Michael Harris, and the Australian National Audit Office, I am very pleased to welcome you to the IMPACT 2023 Conference.

In particular, I would like to welcome my fellow Auditors-General from SAIs around the world and senior representatives from audit offices and courts of audit. Joining us for IMPACT 2023 are:

• Mr Girish Chandra Murmu, Comptroller and Auditor General from SAI India.
• Mr John Ryan, Controller and Auditor-General from SAI New Zealand.
• Mr Fuimaono Camillo Afele, Controller and Auditor General from SAI Samoa.
• Minister Benjamin Zymler, Controller General, from SAI Brazil and
• Mrs Ha Thi My Dzung, Deputy Auditor General from SAI Vietnam.

I would like to extend a very warm welcome to representatives at the conference from SAI Indonesia and SAI Papua New Guinea with whom the Australian National Audit Office has longstanding bilateral relationships with.

• We will hear from Dr Agus Joko Pramono, Vice Chairman of the Audit Board of the Republic of Indonesia later this morning on the topic of Attracting and developing the auditors of the future and the skills our professions need for a digital world.
• Also joining us is Mr Gordon Kega, Auditor-General from SAI Papua New Guinea along with Mr Thomas Holland, Deputy Auditor-General, National Government Audit Division.

On behalf of the ACT Audit Office I would also like to extend a warm welcome to the performance auditors attending from their twinning partner, SAI Kiribati.

I would also like to welcome Auditors-General and their officials from across the audit offices of the states and territories of Australia.

I would also like to extend a warm welcome to our speakers who have agreed to talk to us. I think we have a great cross section of speakers over the next two days presenting about their experiences and expertise through the lens of their roles in the Parliament, the Australian public service, academia, the private sector and of course audit practitioners.

I think it is also important to acknowledge the distances that many of you have travelled to participate in this conference. For example, we have performance auditors joining us from SAI Fiji, SAI Kiribati, SAI Samoa, SAI Solomon Islands and SAI Tuvalu.

The International Meeting of Performance Audit Critical Thinkers (IMPACT) is intended as a biannual event that brings together auditors to discuss emerging issues and best practices in performance audit with experts, practitioners and anyone interested in government accountability.

IMPACT is our professional conference for performance auditors. As performance audit is only undertaken by public sector audit offices it does not have the same level of industry driven conference opportunities that financial statements auditors enjoy. There is no profession outside of us, being the collective of performance auditors in audit offices, so this Conference is what the Australasian Council of Auditors-General (ACAG) has established as a framework to share ideas across our profession and become as a profession better at what we do.

IMPACT 2023 will be the third IMPACT held since its inception. The first was held in 2016 in Brisbane and the second in Sydney in 2018. We were to have had IMPACT 2020 in Melbourne. Sadly it had to be cancelled at the last moment due to what was at the time an unprecedented lockdown to address an outbreak of what was soon to be known as COVID 19. I would like to take this opportunity to acknowledge the effort of the Victorian Auditor-General’s Office in preparing for the 2020 IMPACT conference.

Noting how fortunate we are to be able to meet in person once again, I encourage you to network during the breaks to maximise the value you obtain from the performance audit experience in the room. Boardrooms have been reserved for meetings and if you would like to book some time in a room please see staff at the registration desk.

This evening we have a dinner at The Marion on Lake Burley-Griffin. We will celebrate some of the excellent work from across the performance audit sector through the Australasian Council of Auditors-General (ACAG) performance audit awards and enjoy hearing from our dinner speaker Mr Li Cunxin, author of ‘Mao’s Last Dancer’.

Framing the conference

We have a really insightful conference program to share with you.

The theme of IMPACT 2023 is The Auditor of the Future and there are two sub themes. The first sub-theme is technology as a tool. The second sub-theme is technology and the impact on the auditor. IMPACT 2023 will aim to explore the exponential rate at which technology is developing and its effect on the future of audit. Tomorrow’s auditors will need to be technologically savvy and adapt to the changes in business models to execute high quality audits and continue to service the public and Parliament.

I am looking forward to hearing the presentations and contributions to the panels across the conference. These presentations and panels include engaging keynote speakers who are offering a big picture view of the future of work and the way we do business along with audit experts leading future-focused sessions directly linked to the auditing landscape; and valuable insights from leaders in the Australian Public Sector.

We have asked our speakers to talk about the top challenges faced by audit institutions as they adapt to this new technology-driven future.

One aspect of the program that is particularly important to me is this afternoon’s discussions that have an ethics focus. Some of you may be aware that my office has been developing an ethics audit methodology. This methodology has been applied in our work and we have recently tabled in the Australian Parliament a number of audits that have included a view on the ethics of the delivery of government programs, primarily procurement activities to date.

For example, our audit report on the Digital Transformation Agency’s Procurement of ICT-Related Services includes an appendix which sets out the key ethical behaviour requirements in the Commonwealth Procurement Rules and instances where there was evidence of entity non-compliance identified during the audit. Greater scrutiny of ethical frameworks looks beyond technical compliance and towards operating within the intent of established rules and frameworks, alongside community expectations of integrity.

The program also has a series of presentations that focus on audit impact. Audit offices are continuously seeking innovations to help our messages be heard and to be a source of useful information to the Parliament and in the eyes of the public. For the first session on day two we will be joined by Ms Karen Hogan, Auditor-General of Canada who will be talking about her experiences in building audit impact and the relationship with the Parliament. Following Ms Hogan’s presentation, Mr Girish Chandra Murmu, Comptroller and Auditor General from SAI India, will speak about the impact of performance audits from the Indian perspective.

We will then hear from Ms Elizabeth Kikkert MLA who is the Chair of the Legislative Assembly Standing Committee on Public Accounts here in the Australian Capital Territory. She will provide a Parliamentary perspective on how to build the impact of audits. Ms Kikkert’s presentation will be followed by the presentation of case studies which look at the impact of audit work from the perspectives of the auditor and the auditee.

There are also some special breakout sessions on environmental auditing and environmental regulatory networks so we can hear about some of the important work happening in this developing space and the role audit will play in providing assurance.

We have also asked our speakers to talk about how audit institutions can make better use of big data, analytics, and artificial intelligence in their work. This is very much a challenge of today and the future. There is so much change occurring. New systems are being built and adopted by entities. The protection of data is an ongoing management challenge for governments and for audit offices with daily news of companies being hacked and data stolen. Our ability to audit the data is testing the capabilities of our people and driving continuous learning to maintain a contemporary understanding of systems. It is really great to have opportunities such as this to share knowledge with performance auditors around the world about how they are tackling these challenges and to hear from experts in this constantly evolving area.

The Keynote Address today will be given by Senator the Hon Katy Gallagher who holds the positions in the Australian Government of Minister for Finance, Minister for Women and Minister for the Public Service. Senator Gallagher represents the Australian Capital Territory in the Australian Parliament.

The Auditor of the Future

The Auditor of the Future is a pretty useful theme for a forum for performance auditors to share their understanding of challenges faced in the public sector, look for opportunities to draw on good ideas in other regions, to get ideas for collaboration and to build stronger networks and opportunities for professional exchange.

Where does one start these discussions in 2023? Well, we asked ChatGPT to write 100 words on the performance auditor of the future. Chat GPT told us that:

The performance auditor of the future will be a highly skilled professional equipped with the latest technologies and analytical tools. They will possess a deep understanding of data science, artificial intelligence, and machine learning to enhance their audit capabilities. (I note that ChatGPT didn’t seem to see this point as a bit self-serving, but went on to say) The future performance auditor will be a strategic partner to management, providing value-added insights on organisational performance and risk management. They will also possess excellent communication and collaboration skills to engage stakeholders and build trust in the audit process. As the business landscape evolves, the performance auditor of the future will need to remain adaptable and agile to stay ahead of emerging risks and opportunities.

A reasonable answer, but maybe not fully grasping the differences between public and private sector auditing as well as financial and performance auditing. Maybe this conference will help it learn.

In my experience it is a very human behaviour to think about the future. The future arrives everyday. While it is hard to make predictions about what the future might hold for an audit office, we can and should try, or else we are in danger of not having an observing and learning mindset and missing the signals of change. There are long lead times to change an organisation in terms of capability and when you combine that with the lead time for performance audit there is a risk that if you are not scanning the environment to think about the future then you are always playing catch up. In the relatively conservative world of audit things can always feel pretty static, but when you look back we can often see lots of change.

As audit offices we need to prepare for the auditor of the future but we also need to prepare our auditors for the future. It is always a good idea to think about what our environment might look like in the future and also where do we want to be as an audit office in the future and how do we get there.

For the ANAO our corporate plan sets out the work that we have been doing to prepare the office for the future. This work includes the development of the ANAO Workforce Plan 2022–25 which outlines how we will attract, develop and retain the capability of our workforce, to ensure we remain suitably skilled to deliver on our purpose to the Parliament – now and into the future.

While the audit profession will continue to require deep expertise across a range of technical capabilities, our workforce plan adopts an evidence-based approach to identifying and growing the critical roles and skills of the auditor of the future.

In our workforce plan, we have defined the auditor of the future as someone who should be technologically sound with excellent project management skills, possess the ability to adapt to change, be adept at telling their audit narrative and aware of the technological development that can help them do their job. In my experience, those who adapt to performance audit work effectively are usually curious, inquisitive individuals who can apply critical and creative thinking to their work. They have digital proficiency and the confidence to embrace technology and use it to collect and analyse data and to audit new uses of technology by the public sector. Performance auditors need to have the ability to analyse complex problems and clearly communicate technical concepts and audit findings to a range of audiences. We ask them to be professionals who can work in different settings and across teams and often in professional settings where they are auditing far more senior individuals. We need them to be life-long learners who are seeking out opportunities to learn and grow and adapt to changes that occur across the public sector. Sometimes the speed of change is fast due to the need to audit new programs that are being delivered in unique ways, such as the audit work done across the activities of the public service in response to COVID-19. Ultimately, our auditors need to be leading public servants who are demonstrating behaviours which exemplify the Australian Public Service (APS) values and Code of Conduct. At the ANAO we place a particular focus on respect, excellence, and integrity. Independence and neutrality are at the heart of what we do. We set the example. We always need to remember that as auditors, we live in a glass house.

What we have learned through contemplating the ‘auditor of the future’ is that the environment that the auditor will be working in may look different – different data sources, different systems, different IT capabilities, different programs. However, my evidence base tells me that we are adaptable and we do adapt as required.

During my term as Auditor-General I have been impressed by the way the ANAO has met the future head on and tried to be better at what we do. I hold a strong view that as an audit office we can be and should be an innovative organisation and I encourage innovative thinking. At the end of the day, innovation in an audit office environment is often a series of small adjustments and moderate change processes to continually improve what we do and how we do it. I would like to share the types of performance audit innovations that the ANAO has made over recent years.

We have tried to be innovative in how we communicate. This is part of our ongoing journey to try to increase the impact of our work. These innovations include the adjustments that the office has made to the design of our reports and our Annual Audit Work Program with the aim of making these documents and their messages more accessible and readable. To our performance audit reports we have introduced the Audit Snapshot to provide a one page at a glance summary of the conclusions, we have introduced a section setting out key messages from the report for the sector and included an appendix capturing the impacts that have been observed on entity processes during the audit process to help demonstrate to the Parliament what changes happen simply by doing performance audits.

We have added new products to our offering to the Parliament and the public sector including the Audit Insights product which draws upon the findings in our performance audit work but also work from across the office to try to increase our impact. We are currently revising our approach to this product based on what we have learned in terms of the impact of certain topics and our presentation of the product.

We have also commenced undertaking Performance Statements Audits. The new performance audit statements methodology is the most significant change in our audit work in over forty years. It has built on work that has been undertaken in the performance audit field around key performance indicators over a long period of time.

In the development of our performance audits reports, we have incorporated the use of storylines to try to get a better theme in how we write our reports. That is, we are trying to build the report better from the point where auditors start drafting. A storyline is a modular approach to setting out what the key findings are and how they lead to the finding. We have introduced this approach to help performance auditors write more clearly and focus the development of the written report around the most material parts of the audit work that address the audit objective.

We have developed new methodologies about auditing efficiency and ethics. This work is helping the office to increase the focus on these aspects of our mandate to cover the other ‘e’s’ in our performance audit work. That is, we are pushing our work beyond performance audits of entities’ effectiveness and economy and into the decisions to deploy resources with consideration of efficiency and the ethics of the approaches taken to applying tax-payers money. We have conducted 9 audits to date using the efficiency methodology and have seen the ethics methodology applied in recent performance audits on procurement.

We have made innovations in how we increase the efficiency and collaboration in the organisation, including investment in data analytics and the establishment of the Systems Assurance and Data Analytics group. Our Executive Director Xiaoyan Lu is leading one of the breakout sessions on day two and she will talk about the great work that her team has been doing around data analytics. The work by the group and the performance audit teams has been developing over a number of years with some really great examples of how performance audits can utilise data analytics to increase impact.

As an office, we changed how we work through the introduction of an activity based working environment. We have updated our technology and made it available to all staff to enable them to operate under an activity-based approach to work. That is, staff can work in the environment that is most appropriate for the type of work they are doing, taking into account business needs.

Being an organisation that is committed to quality does not mean that we cannot be an innovative organisation. We tend to be slow to move and considered in how we do things. Becoming the auditor of the future is not something that is going to be delivered through a single training program, it is about auditors being aware, considering risk and adapting to change.

As auditors, we are all thinking about how we position our offices for the future and thinking about what the auditor of the future needs. Through head of SAI level engagements, I have learned about how my Auditor-General colleagues have adapted and addressed change as they have encountered it. I value the opportunities that are available for auditors to meet and discuss what risks they are working with and the response that they have put in place. This sharing of experience is valuable, particularly when there are so few of us. There is always a surprisingly similar list of risks shared albeit context may vary.

I also value these meetings for the opportunity to hear about the innovation of other audit offices. I have observed that all performance audit practices are striving to deliver more impactful audits and each office adjusts to try to improve impact. In my view, we cannot be shy about borrowing the good ideas for innovation and adaption that are generated by our peers. Indeed, many of the changes I just mentioned were shamelessly stolen for other offices. It is through conferences such as this one that we can better understand what our peers are doing.

From my perspective, it gives me great comfort that there has been innovation during my term and I consider that that this positions the office well to support the auditor of the future but to also be the auditors of the future. It also gives me comfort that there has been stability in the outcomes that we seek, the professionalism/independence/neutrality of our staff and, I hope, the trust in the quality of the work that we produce. As this is the basis for us to remaining an enduring/impactful integrity institution.

I would like to finish by thanking you for investing in the future of performance audit through your involvement in this conference. I look forward to talking to many of you over the next two days.