Agenda item

To provide the Audit & Governance Committee with oversight of the plan for the external audit of the 2023/24 statement of accounts. 

Witnesses:

Janet Dawson, Partner, EY (remote via Teams)

Nikki O’Connor, Strategic Finance Business Partner (Corporate)

Key points raised in the discussion:

1.    The Partner - EY noted that the to be confirmed (TBC) fees that were omitted in June’s report had been included as requested by the Committee, the associated fees reflected the areas of work anticipated to be undertaken. She noted that EY based its expectation on similar work at other audited bodies and it was similar to what PSAA would typically determine. Progress was being made working with the Council’s Finance team.

2.    The Chairman asked whether the work on the walkthrough testing was on track. The Partner - EY explained that EY was dividing its time between preparing for the execution phase and the walkthrough work. She noted that there had been some delays on the Council’s side in terms of the final preparation of the financial statements access to data for EY to complete that. Work was slightly behind schedule and with the Council’s Finance team she would be discussing how to retrieve some of that time at the end of the process.

3.    The Chairman asked whether that delay would affect the scheduling of the substantive testing. The Partner - EY hoped that the revised data from the Council’s Finance team would be provided by next week following changes made. She noted a week’s delay in the sampling work which was scheduled to be undertaken by 22 July, the team would be in place then so would progress the work intensively.

4.    A Committee member referred to paragraph 10 of the cover report noting that there were direct risk management implications. The Strategic Finance Business Partner (Corporate) noted that there were not any risks that were not already covered in Annex 1.

5.    A Committee member referred to the ‘Audit risks and areas of focus section’ and column on ‘Risk identified’, querying whether risks were just categorised rather than being meaningfully assessed. The EY - Partner explained that it was EY’s assessment as to the risk that it provides an inappropriate opinion on the Council’s financial statements, as defined within the International Standards on Auditing (ISA). EY was required to look at the risk of fraud within the organisation that may lead to a material misstatement, missed when it provides an opinion. A significant risk was where EY thought that there was an issue with the way the numbers were derived due to their complexity or were estimated. Other risk areas related to where EY thought that the risk was less likely, but it undertakes work to ensure risk mitigation to provide an appropriate opinion.

6.    A Committee member referred to the various number of specialists to be used and asked whether their estimated time would be factored in and what the additional cost would be. The Partner - EY explained that EY identified the specialists to be used and what specialist knowledge was needed to assess their judgements, those costs were factored into the fees.

7.    A Committee member welcomed the inclusion of the fees.

RESOLVED:

1.    Noted the changes made to the External Audit Plan as requested by the Committee on 5 June 2024.

2.    Approved the revised 2023/24 External Audit Plan (Annex 1).

Actions/further information to be provided:

None.