Draft Audit Arrangements (PDF 16kb)

When finalised, the standard will replace the existing Prudential Statement on Relationship Between Banks, Their External Auditors and the Australian Prudential Regulation Authority (PS H1) for banks, and the FI Scheme Prudential Note on Audit for building societies and credit unions. APRA will then commence work with the Auditing and Assurance Standards Board on an Auditing Guidance Statement (AGS) to replace existing AGS 1008 (Audit Implications of Reserve Bank Prudential Reporting Requirements) and AGS 1010 (Audit Obligations of the Financial Institutions Scheme).

The draft standard is based on PS H1. It prescribes a tripartite arrangement between APRA, an ADI and its external auditor under which the external auditor is commissioned to provide assurance to APRA regarding the reliability of information provided by the ADI to APRA. Like PS H1, the draft standard requires an annual management attestation from the ADI regarding the adequacy and appropriateness of its risk management processes. The FI Scheme requirement for auditors to report on the compliance and adequacy of risk management systems and internal controls of an ADI does not form part of the new arrangement.

The draft standard, as well as PS H1 and the FI Scheme Prudential Note on Audit, are available on the APRA website, http://www.apra.gov.au

Comments are invited on the proposed standard by 21 June 2000, and may be addressed to:

Mr Brian Gray
Executive General Manager
Policy, Research and Consulting
Australian Prudential Regulation Authority
GPO Box 9836
Sydney NSW 2001

Alternatively email ADIstandards.audit@apra.gov.au

For further information, contact:

Gloria Peterson
Public Affairs Manager
02 9210 3385