Audit delivery during Covid-19

Covid-19 severely affected audit timeliness. Overall, 63% of audits were completed before the statutory deadlines in 2019/20 – compared to just over 80% before the pandemic. Schools were particularly affected by lockdowns from March through to early May 2020, which had a marked effect on the audits. Only 59% of school audits were completed on time, down from 82% pre-Covid.

In 2019/20, we completed 97% of the audits of large public organisations on time. We were assisted by Parliament agreeing to extend the statutory reporting time frames by two months for public organisations with 30 June 2020 balance dates.

In 2020/21, we completed 96% of audits of large public organisations on time. Covid-19 was not in the community and lockdowns were generally short and infrequent. However, we experienced increasing pressures on audit delivery, with borders remaining closed and a global auditor shortage affecting the capacity of audit service providers. In July 2021, Parliament again agreed to extend the statutory reporting deadlines for local authorities and most Crown entities by two months for 2021/22 and 2022/23.

The pressures on audit delivery were strongly felt in 2021/22. New Zealand entered lockdown in August with the arrival of the Delta variant. Auckland remained in lockdown until early December. This, combined with illness due to community transmission and ongoing border closures, presented a serious challenge.

Despite these challenges, 88% of the audits of large public organisations were completed on time. In 2021/22, we began to reallocate audits between audit service providers to ensure that the available auditor capacity was utilised.

Covid-19 continued to affect auditing over the past year, particularly the first half of 2022/23. A number of large public organisations struggled to provide quality information ready to audit, including the disestablished district health boards, institutes of technology and polytechnics, and a number of councils, despite extended deadlines. These were especially complex audits with their own particular issues, including district health boards’ compliance with the Holidays Act 2003 and issues stemming from the different disestablishment dates of the tertiary education providers.

In total, as part of our commitment to complete deferred audits, we reallocated 80,000 hours of audits from Audit New Zealand to other audit service providers. In 2022/23, we completed 74% of audits of large public organisations on time.