Strategic priority 1: Strengthening our core assurance role

Draft annual plan 2024/25.

The public audit system provides assurance that public organisations report relevant and reliable information about their finances and performance to Parliament, councils, governors, and the public.

In 2024/25, we will audit about 3300 public organisations. This work is carried out by Audit New Zealand and private sector audit firms appointed by the Auditor-General.

The public audit system is critical to effective public accountability but it is under significant pressure. Therefore, we are proposing a range of work to continue strengthening public audit.

The current challenges for public sector audit

We are well placed to return public sector audit completion to time frames similar to before the Covid-19 pandemic. Our larger audits are now meeting or exceeding pre-pandemic timeliness. However, the timeliness of audits of schools and smaller public organisations remain a challenge. Improving the timeliness of these audits will be a focus in 2024/25.

There continues to be a worldwide shortage of auditors. Fewer people are studying accounting-related subjects in tertiary education, which means this shortage is likely to endure. We will continue to work with professional bodies to promote auditing as a career and strengthen the pipeline of professionals interested in public sector auditing.

We have built relationships with overseas public audit offices (including Australia and the United Kingdom) to support peak workloads through secondment arrangements. This also helps build career paths for our staff in public sector audit. We will continue to build on these relationships in the coming year.

Audit allocation strategy

During the Covid-19 pandemic, the Auditor-General reallocated about 80,000 hours of audit work between audit firms. This reallocation was done to relieve pressure on audit staff and ensure that audit quality and, to the extent possible, timeliness were maintained.

In 2024/25, we will continue to improve the delivery of public sector audits. This will involve right sizing the Audit New Zealand audit portfolio and adjusting the allocation of audits between providers where necessary to continue to ensure that quality audits can be delivered.

Auditing schools

Every year, nearly 2500 schools and organisations related to schools are audited. These audits are carried out by private sector firms on behalf of the Auditor-General.

Appointing auditors to carry out school audits on the Auditor-General’s behalf is becoming increasingly challenging.

The Covid-19 pandemic and the resulting auditor shortage created delays in school audits. There is also a decrease in the number of firms that meet our quality standards interested in carrying out school audits.

Work under way:* Ensuring the completion of quality and timely audits of schools
In 2024/25, to ensure that quality audits of schools are completed in a timely manner, we will implement a programme of work that is aimed at:
  • increasing audit resources by identifying new and appropriately qualified audit service providers;
  • increasing audit efficiency by implementing a new International Auditing Standard on Less Complex Entities;
  • introducing further guidance and standard working papers for key audit areas, and working with the Ministry of Education to simplify schools’ financial reporting; and
  • ensuring that school audit fees remain reasonable and competitive.

* Work under way is work that we have started under our current annual plan. Planned work is work that we intend to start in 2024/25.

Climate-related reporting

There are new audit requirements for climate reporting and an increasing demand from stakeholders for quality climate-related information.

Reporting on climate-related matters is evolving. We expect public organisations to report climate-related information that is relevant, reliable, transparent, and understandable. Our assurance work, where mandated, will further support this.

The Financial Markets Conduct Act 2013 requires public organisations that meet the “climate reporting entity” definition to prepare and report a climate statement.4 The first climate statements are required for the accounting periods beginning on or after 1 January 2023. The Financial Markets Conduct Act also requires, from 27 October 2024, greenhouse gas metrics and related disclosures in the climate statements to be independently assured. The Auditor-General is the assurance provider for climate-reporting entities that are public organisations. We are well advanced in preparing for this assurance work.

Work under way: Readiness for climate reporting by public organisations
In 2024/25, we will continue our climate reporting-related assurance work to ensure that we are well positioned for the new assurance requirements for climate-reporting entities. We will also continue to complete audits of climate-related information in public organisations’ performance information. This work includes:
  • influencing regulators and those developing standards to ensure that climate reporting and assurance standards (and guidance) are fit for purpose for all public organisations;
  • building our capability so that we can carry out the required assurance work;
  • preparing and delivering technical advice and guidance to support auditors and climate-related disclosure assurance providers; and
  • carrying out quality audits of greenhouse gas emissions (and where relevant other climate-related measures) reported by public organisations in their audited performance information.

Audit New Zealand Practice Improvement Programme

Audit New Zealand is a critical part of the public audit system. This is because it:

  • has specialist expertise in public sector accounting and performance reporting;
  • provides an auditor option where private sector firms are not willing or able to carry out the audit work;
  • carries out audits that the private sector cannot readily carry out, such as for national security reasons; and 
  • provides a benchmark for cost and quality.

In 2023/24, we completed a review of Audit New Zealand’s practice management. We also commenced a programme of work to help better position Audit New Zealand in its role as a leader in public audit services.

Work under way: Audit New Zealand Practice Improvement programme
In 2024/25, we will implement the recommendations from the Audit New Zealand Practice Management Review. We will also roll out new technology to support audit delivery and efficiency.

Reporting on audit results

Each year, we consolidate the results of our annual audits for key sectors. We present the main findings from these audits in reports or letters and use them to advise select committees, inform the public, and inform our work programme.

Planned work: Sector reports
In 2024/25, we plan to report on our observations from the latest completed audits in:
  • central government (including the Controller function and the Government’s financial statements);
  • local government;
  • schools;
  • tertiary education institutions;
  • licensing trusts;
  • Crown research Institutes;
  • the energy sector (electricity distribution businesses); and
  • health regulatory agencies.

The Controller role

The Controller role provides assurance to Parliament and the public about whether the Government has incurred expenditure in accordance with parliamentary authority. To support this function, we monitor public expenditure and carry out appropriation audits of government departments. We report our findings and conclusions from this work to the Treasury in monthly Controller reports.

Our report on the central government audits includes our Controller function work for the financial year. We also produce an interim report on our half-year findings (our work from 1 July to 31 December of each year) and occasional reports on matters of interest related to Controller work.

Planned work: Half-year Controller update
In 2024/25, we will provide our regular half-year Controller update, which provides an account of our work and findings for the first six months of 2024/25. We will also summarise findings for the year in our annual report on central government audits. Where Controller matters arise during the year, we will report separately on these.

4: See section 461O of the Financial Markets Conduct Act 2013 for the meaning of climate reporting entity.