Decision - Ernst & Young: External Audit Plan 2012/13

91.1         The Committee considered a report of the Executive Director of Finance & Resources in relation to the Ernst & Young 2012/13 Audit Plan. The report set out how the external auditors intended to undertake their responsibilities. The report summarised the progress to date; an assessment of the key risks and an outline of the strategy in response to those risks.

91.2         Councillor Wealls asked questions in relation to ‘Journals processed n the general ledger’, and in response the External Auditor, explained that a journal was an entry onto the financial ledger that shifted expenditure or income from one account code to another; this was sensitive as although journals cannot impact on cash directly, incorrectly coding expenditure or income could lead to a misreport in the authority’s financial position and the potential for fraud. The value of the journal should be reflected in the level of seniority of the Officer who was able to sign this off, and evidence would need to also accompany it. The external auditors would expect to see effective controls to prevent fraud before it could happen rather than look at this retrospectively.

91.3         Councillor Ann Norman noted that the fee scale for the audited accounts was lower than the Council had been charged in previous years, and she asked if there was less work being carried out. In response the External Auditor clarified that their responsibilities and duties remained the same.

91.4         RESOLVED – That the Committee consider the 2012/13 Audit Plan and ask questions as necessary on our proposed audit approach, progress to date and audit scope.