A stronger new code for auditors

Our new Code of Audit Practice marks an exciting step change in the responsibilities of auditors looking at spending and services by public bodies in Scotland. Following an extensive consultation, these changes will come into force from the start of the 2016/17 audit appointments in October.

Two years ago we recognised that if we wanted to deliver a world class public audit service, we’d need to revise and improve the code. The challenge was to produce a code  grounded in legislation and auditing standards but which could also be applied by auditors to the wider scope of  public audit  and the developing approach to the audit of Best Value.

We also knew that Scotland’s public sector was undergoing a significant period of change and by revising the code we’ve set out to ensure our work adds more value and makes a real difference to public services in Scotland. It requires auditors to comply with professional and ethical standards, and sets out in detail their responsibilities, and those of audited bodies. It also sets the strategic direction of all audit work carried out for the Auditor General for Scotland and the Accounts Commission.

In order to achieve world class public audit and give reassurance that we’re all receiving value for money from public spending, the new code aims to assist improvement by audited bodies in the delivery of services. It does this by requiring auditors to use their work to provide explicit conclusions on four key aspects: financial sustainability, financial management, governance and transparency, and value for money.

Reporting against these dimensions means that auditors must be clear when highlighting significant risks within audits that they also provide a judgement on how effectively the audited body is mitigating these risks. Clarity about the potential impact of risks and making recommendations for improvement creates an enhanced understanding for the organisation and the public of how an audited body is performing.


The code also formalises the commitment of auditors to sharing knowledge and resources, giving an enhanced ability to address audit risks. This means financial and performance auditors working together to maximise the value and impact of public audit for service delivery.

Appointed auditors also have an option to carry out a reduced wider scope audit for low risk small audits. This maximises available audit resources, enabling a greater focus on higher risk audits. Our work is, however, firmly grounded in legislation and auditing standards. Compliance with the code is a condition of appointment for auditors appointed by the Auditor General or the Accounts Commission.

And continuing our commitment to making our audit work as transparent and accessible as possible, we’ll be publishing all our principal audit reports, such as annual audit plans and final reports, on our website.

The new code equips auditors with the information and structure they need to carry out their role effectively within the changing landscape of public finances and services. Building on our independent and authoritative reputation within Scotland’s public sector, the code helps to ensure a strong and effective system of financial accountability and transparency with public audit at its centre.

About the author

OwenOwen Smith is a senior manager in Audit Scotland’s audit strategy group. He is responsible for audit procurement, audit quality and the National Fraud Initiative (NFI) in Scotland. He has been working in public audit since 1997 and been with Audit Scotland since its creation in 2000 working mainly in local authority audits. He is currently finalising the 2016 NFI report.

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