External audit

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The arrangement between the Australian Dairy Corporation and Dairy Adjustment Authority for the management of the Dairy Structural Adjustment Program and its funds is unique in the Commonwealth. The Australian National Audit Office advised the Authority on the presentation of the annual statutory accounts for reporting to Parliament and provided an independent audit opinion on the Authority’s financial statements.

ANAO procedures included examination on a test basis of evidence supporting the amounts and other disclosures in the financial statements and the evaluation of accounting policies and significant accounting estimates.

In forming their opinion, the external auditors reported that they had considered the key processes which generate the financial information. Their audit coverage included:

• Maintenance of the register recording entitlements to dairy producers, and operation of the Dairy Entitlements System;
• Determination of dairy producer entitlements;
• Direction to the Australian Dairy Corporation to pay entitlements;
• Key Corporation interacting processes, including information technology, and
  financial statement close.
  

The external auditors considered and utilised the work of the internal auditors in analysing these processes, after considering the independence of the internal audit function, reviewing its testing and outcomes, and conducting limited re-performance of testing.

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