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Departmental Audit

Transport written question – answered on 12th December 2011.

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Photo of Gareth Thomas Gareth Thomas Shadow Minister (Cabinet Office), Party Chair, Co-operative Party

To ask the Secretary of State for Transport what criteria (a) her Department and (b) its public bodies use when deciding whether and when to hold an internal audit; and if she will make a statement.

Photo of Norman Baker Norman Baker The Parliamentary Under-Secretary of State for Transport

Internal audit functions for the Department for Transport, its executive agencies, trading funds and non-departmental public bodies operate to a common methodology, which is consistent with the requirements of the standards issued by the Institute of Internal Auditors, and with Government Internal Auditing Standards.

Audit planning is designed to identify organisational objectives, risks to the achievement of objectives and controls used to manage risks in order to provide integrated assurance to each Accounting Officer. This is achieved through a combination of top-down and bottom-up approaches to identify and prioritise audit assignments consistent with the following criteria:

alignment to key business/corporate plans, objectives and priorities; assures the mitigation of board-level strategic risks, and key risks for constituent parts of each organisation; reflects the maturity of existing internal control frameworks, risk management processes and assurance sources; provides coverage of core internal/compliance functions; revisits areas audited in previous years that require follow-up; activity mandated by HM Treasury, Cabinet Office, etc; where appropriate, responds to management requests for advice on improving the management of risks and internal controls/operations; or investigates impropriety and other irregularities (for example, arising from whistleblowing or allegations of fraud); is delivered by the most appropriate assurance provider (for example, does not duplicate work of others such as the external auditors); and is scheduled when the activity will provide most value, within the confines of the availability of audit resources and the need to provide an annual audit opinion.

The resulting plan is presented to the Accounting Officer and to the Audit Committee, who provide a ‘top down’ view, prior to formally agreeing the plan.

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