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NAO launches Code of Practice consultation for local public audits

The National Audit Office (NAO) has launched a public consultation on a draft Code of Practice for the auditing of local public bodies. 

Under the remit of the new proposals, the NAO stated that the Code needs to preserve the independence of auditors and their ability to exercise professional judgement, based on their understanding of the sector and the particular risks and challenges that individual audited bodies face. 

Amyas Morse, comptroller and auditor general at the NAO, in his consultation foreword said: “The application of the Code by auditors must ultimately be determined by their view of the precise nature and amount of audit work needed to meet their statutory responsibilities at each audited body.” 

This latest move follows the announcement in August 2010, by the Secretary of State for Communities and Local Government, of the government’s intention to disband the Audit Commission and introduce new audit arrangements for local public bodies. 

Under the Local Audit and Accountability Act 2014, the head of the NAO takes on from the Commission the role of preparing and maintaining the Code of Practice for local public audits. 

The draft Code sets out the framework within which the auditors of local public bodies are required to carry out their work, and extends the comptroller and auditor general’s responsibility so that the Code also encompasses the audit of NHS foundation trusts. 

Morse added: “The work of external auditors plays a vital role in improving public services and in helping people hold users of public money to account. 

“This consultation will play an important part in helping the NAO produce a Code of Audit Practice that addresses the needs of audited bodies, the local electorate and Parliament.” 

Subject to Parliament’s approval, the Code will take effect from 1 April 2015 for audits for the financial year 2015-16. 

The consultation is open to anyone with an interest in the draft Code. The deadline for responses to the NAO is 31 October 2014. Following the consultation, the NAO will publish the final Code before the end of 2014, for consideration in early 2015 by Parliament. 

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