Agenda item

External Audit Plan 2018/19

To receive and note information from the Council’s External Auditors on the audit plan for the 2018/19 External Audit.

Minutes:

The Committee considered the plan for the 2018/19 External Audit of the Council, as provided by the Council’s External Auditors. It was identified that the external auditors had received information on previous external audits from the preceding external audit provider. It was identified that the audit would include consideration of potential risks including the completeness of expenditure, property valuation, management override of controls, pensions liability valuation, and value for money, and would be conducted in accordance with international standards on auditing.

 

The Committee considered and discussed the plan. There were a number of questions and comments relating to the following topics:

 

·         Materiality. It was confirmed that the identified materiality level was assessed to be appropriate for the audit being undertaken, in line with established auditing standards and professional practices. In response to Member concerns regarding the level, it was also confirmed that all misstatements in excess of £110k would be reported, that all misstatements below this threshold considered to be material would be reported, and that the Council would be requested to correct any identified errors. It was identified that multiple related items below the threshold would commonly be aggregated with regard to consideration of materiality.

·         Group considerations and significance. It was confirmed that, for the purposes of the audit, the subsidiaries and ventures of the Council were not considered to be significant as the values of each of the entities were all well below the standard 10% significance threshold. It was confirmed that any significant issues arising would be considered.

·         Completeness of Expenditure. It was identified that plan identified that any significant downward movements in year on year accruals would be investigated, based on the significance of the assessed risks, but that the audit would consider any unusual movements in any direction.

·         Bank Balances and Trading Companies. It was confirmed that a written response could be provided by the auditors, providing additional information on the detailed testing of bank balances and trading companies.

·         Management Override. It was confirmed that management override of controls was considered to be a significant risk by auditing standards, and thus would be considered on this basis as part of the audit. It was confirmed that there were no identified reasons to believe that there was any greater risk of override in the case of the Council than in any other case.

·         Pension Liability. It was confirmed that the identified pension liability was with direct regard to the Council.

·         Scope of the External Audit process. It was confirmed that the planned audit would cover all relevant external audit matters, in line with auditing standards, and that the limitations of the scope of the audit identified in the plan were to clarify that the audit would not identify all issues outside of these matters.

·         Internal Controls. It was confirmed that the audit would both consider management representations regarding internal controls, and consider risk areas directly, in line with standard audit procedures and assessed risks.

 

The Committee thanked the External Auditors, and supporting Members and officers, for the presentation of the plan for the 2018/19 External Audit of the Council.

 

RESOLVED that the plan for the 2018/19 External Audit of the Council be noted.

Supporting documents: