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Maintaining your registration as an auditor

22 September 2020

Contents

As a registered auditor, you must continue to meet the eligibility requirements detailed in the National Greenhouse and Energy Reporting Regulations 2008 (the NGER Regulations). These requirements include that you:

  • comply with the code of conduct
  • act independently and perform objective audits
  • maintain adequate insurance
  • actively participate in audits under our schemes and maintain your continuous professional development
  • report to us annually and participate in any reviews or inspections, and
  • retain adequate records.

For more information on audits conducted under the National Greenhouse and Energy Reporting audit framework, see using audits in our schemes and read the audit determination handbook.

You will remain on the register of auditors until you elect to suspend your registration or deregister, or we suspend or deregister you.

Audit team leader requirements

When undertaking the role of audit team leader, you must ensure that you comply with the requirements specific to audit team leaders, many of which are detailed in Part 2 of the Audit Determination. When acting as audit team leader you must:

  • ensure that audit team members collectively have the knowledge, skills and availability required to satisfactorily prepare for and carry out the audit and prepare the audit report
  • supervise the work of each audit team member, and be personally involved in preparing for and carrying out the audit and preparing the audit report
  • document the process used by the audit team leader to prepare for, carry out and report on the audit in compliance with the NGER Audit Determination
  • ensure that the audit is carried out and reported on in compliance with the NGER Regulations, the terms of the engagement for the audit, and the auditing and assurance standards (for more information on applying auditing and assurance standards, see section 1.6 of the Audit determination handbook), and
  • ensure that the peer reviewer you select undertakes a thorough peer review.

In addition, before agreeing to the terms of the engagement for the audit, you must provide the person who appointed you to carry out the audit with a signed independence and conduct declaration for both yourself and all professional members of the audit team. This declaration must state:

  • whether you or any members of your team will be in a conflict of interest situation or be in breach of the independence requirements under the NGER Regulations
  • whether you will be in breach of the auditor rotation requirements and, if so, whether an exemption has been granted, and
  • that you will comply with the Code of Conduct.

The role of an audit team leader is by personal appointment. Audit team leaders cannot unilaterally appoint another Category 2 registered greenhouse and energy auditor to be an audit team leader. Guidance is outlined in Being appointed as an audit team leader.

For more information on your requirements when undertaking the role of audit team leader, see Part 2 of the NGER Audit Determination.

Auditor code of conduct

As a registered auditor you must abide by the Code of Conduct set out in regulation 6.46 of the NGER Regulations. This code outlines the expectation that you will:

  • comply with the law and regulation that apply to you as a registered greenhouse and energy auditor
  • behave with integrity and objectivity
  • apply professional competence and due care
  • be honest and truthful in marketing or self-promotion
  • ensure that other audit team members comply with the code of conduct if you are conducting an audit as the audit team leader, and
  • avoid any action that may bring discredit to yourself or greenhouse and energy auditors generally.

Auditors must not misrepresent their status as a registered greenhouse and energy auditor. Guidance is outlined in Guidance for auditors on Marketing and promotion.

Conflict of interest

You must be independent from the entity you audit. To maintain independence, you must not participate in schemes the Clean Energy Regulator administers.

Auditors are deemed to have a conflict of interest if they:

  • participate as a proponent, agent or investor in an Emissions Reduction Fund project
  • bid in Emissions Reduction Fund auctions, or
  • trade in Australian carbon credit units.

If you become aware of a conflict of interest situation when conducting an audit, you must take all reasonable steps to ensure the situation is resolved.

Where conflicts are not remedied, or exemptions are not provided, you must cease involvement with the audit.

Please contact the Clean Energy Regulator if you are at risk of being in a conflict of interest situation, or if you require further information.

Insurance

When preparing for and undertaking an audit, you must have adequate professional indemnity insurance. Professional indemnity insurance provides cover to you against allegations of professional negligence. The requirements have changed; minimum insurance amounts now increase with the value of the audit.

Section 6.60 of the NGER Regulations prescribes the minimum standards of cover required for audit team leaders when undertaking an audit. It is up to you to determine whether your insurance is adequate to meet your obligations under the NGER Regulations.

Your professional indemnity insurance should cover all aspects of your work. Generic policies may leave gaps in your insurance or not offer enough cover. The nature of your work is one of the factors taken into consideration by insurance firms when setting premiums, and auditors are often considered to carry more inherent risks than consultants. While this means that premiums are usually higher for auditors than they are for consultants, it is vital that you accurately describe your work, as not doing so could mean you are not adequately covered.

Even if you already have professional indemnity insurance cover, you should regularly review your cover to assess whether your insurance continues to be suitable.

Participation

To maintain your registration under regulation 6.66 of the NGER Regulations, you must participate in a substantial way in at least three audits every three years.

Category 1

For Category 1 auditors, participation in a substantial way means performing both of these activities in at least three audits every three years:

Participation requirementMinimum activities
Team member hours
  • Participate as a team member in audits with hours of participation total 90 hours or more.
Number of audits
  • Participate as a team member in three audits.

Note:

  • Participation can be spread across multiple audits. There is no minimum or maximum number of hours per audit.
  • Peer review is not acceptable for Category 1 participation requirements.

Category 2

For Category 2 auditors, participation in a substantial way means at a minimum performing one of the following activities in at least three audits every three years:

Participation requirementMinimum activities
All team leadership (agency preferred)
  • Perform as team leader and prepare the audit report for three audits.
Two team leaderships and peer reviews
  • Perform as team leader and prepare the audit report for two audits, and
  • Perform as peer reviewer in three audits.
Two team leaderships and team membership
  • Perform as team leader and prepare the audit report for two audits, and
  • Perform as a team member perform as team member in audits with a minimum of 30 hours across all the audits.
One team leadership and peer reviews
  • Perform as team leader and prepare the audit report for one audit, and
  • Perform as peer reviewer in six audits.
One team leadership, team membership and peer reviews
  • Perform as team leader and prepare the audit report for one audit
  • Perform as a team member in audits with a minimum of 30 hours across all the audits, and
  • Perform as peer reviewer in three audits.
One team leadership and team memberships
  • Perform as team leader and prepare the audit report for one audit, and
  • Perform as a team member in audits with a minimum of 60 hours across all the audits.

Note:

  • Meeting the above requirements would constitute complying with regulation 6.66. However, since the primary role of Category 2 auditors is to lead audit teams, the agency would prefer that auditors meet the requirements of regulation 6.66 through ‘All team leadership’ in at least three audits every three years.
  • These options are minimum requirements every Category 2 auditor must meet during each three year period of their registration. Auditors may perform as many team leadership, peer review and team member roles as they choose.

Timing

The agency assesses audit participation in your regular three year registration reviews. Only audits that are completed within the three year period under review can be used to demonstrate participation for that review.

Types of audits accepted

The types of audits accepted for demonstrating participation are either:

  • a Part 6 audit, which is
    • an Emissions Reduction Fund audit
    • a safeguard mechanism audit, or
    • a greenhouse and energy audit conducted under sections 73 or 74 of the NGER Act.
  • OR
  • an alternative audit, which is:
    • considered comparable to a Part 6 audit
      and, is:
      • a voluntary audit conducted under the National Greenhouse and Energy Reporting scheme or the Emissions Reduction Fund that is in addition to specified requirements, or
      • an exemptions certificate audit conducted under the Renewable Energy Target, or
      • any other audit the Clean Energy Regulator commissions.

For an alternative audit to be considered comparable to a Part 6 audit it must be reviewed by the Clean Energy Regulator and deemed to have been conducted in line with the Audit Determination. For the agency to assess these audits and form an opinion that they are comparable, they must be submitted voluntarily and in entirety by reporters, or alternatively by you with the explicit consent of the reporter.

Rotation

Audit team leaders must not be the audit team leader for more than five consecutive Part 6 audits of the same kind carried out in relation to one audited body. Between each set of five consecutive Part 6 audits, there must be at least two successive Part 6 audits where the audited body engages a different audit team leader.

In addition to this requirement, we recommend that auditors should not audit the entire life cycle of an Emissions Reduction Fund project. The Clean Energy Regulator recommends participants engage at least two auditors from different audit firms, and audit participants who meet this requirement are less likely to be selected for additional audits.

Continuing professional development

Continuing professional development (CPD) involves participation in, or attendance at, conferences, seminars, courses, and other kinds of training that are relevant to the:

  • category in which you are registered, and
  • knowledge and qualifications you used for the purposes of registration.

For example, if you are registered as a Category 2 greenhouse and energy auditor, we expect that you will participate in a mix of assurance related as well as any technical related development.

You must complete at least 15 days or 112 hours of continuing professional development in each three year period of registration. The three year period starts on the date you are first registered.

Keep a record of your participation in continuing professional development as we may request evidence as part of a review.

See CPD guidance and types of CPD activities accepted for more information.

Annual reports

You must submit an annual report to us on each anniversary of your registration as a greenhouse and energy auditor. This report must contain professional information about any audits and continuing personal development that you have undertaken during the previous 12 months.

We may request further information from you as part of your annual report; for example, where we have observed a performance deficit in a previous review period and we seek correction, or where we may have previously placed a condition on your registration.

Additionally, if you have registered as a Category 2 auditor, using supervisory hours to demonstrate audit team leadership, we will ask you to include with your annual reports, peer review assessment reports endorsing your performance as a team leader, for each of your first few audits conducted, up to a total of five.

We will assess the information in your annual report and let you know if you are not on track to meet the requirements to maintain your registration.

Reviews

The Clean Energy Regulator may review your registration as a registered greenhouse and energy auditor. Typically, this will occur on each three-year anniversary of your registration and will take into account information provided through your annual reports. We may, however, request other information and documents as part of a review. You will receive a written notice if we intend to review your registration.

If we have changed our position on requirements to maintain registration during your three-year review period, we will take into consideration your activity under previous positions as part of our assessment.

Inspections

In accordance with subdivision 6.5.6 of the NGER Regulations, we may conduct an inspection of your performance as a registered greenhouse and energy auditor. The purpose of an inspection is to:

  • review the decision-making processes you use in carrying out Part 6 audits
  • ensure that you are complying with the requirements of both the National Greenhouse and Energy Reporting (Audit) Determination 2009 (the NGER Audit Determination) and the NGER Regulations in carrying out Part 6 audits, and
  • provide the agency with intelligence to inform its ongoing management of auditor performance.

A range of criteria is considered when selecting auditors to participate in an inspection, such as risk, performance and activity. If you are selected for an inspection you will receive written notice. Inspections are conducted by an independent team of inspectors and may be conducted during or up to 5 years after the completion of a Part 6 audit. For those audit team leaders registered as Category 2 registered greenhouse and energy auditors using supervisory hours to demonstrate audit team leadership, you will be subject to an inspection once you have completed at least one audit as an audit team leader – this may occur within the first 12 months of your registration.

An on-site inspection involves inspecting a number of Part 6 audit files over a period of 2 – 3 days at your premises. We will contact you to advise you that you have been selected for an on-site inspection and arrange a suitable date and time for the inspection team to visit your offices.

When conducting an inspection, inspectors require full and free access to your audit files and other relevant documents. Inspectors may need to take copies of documents to complete their assessments and prepare inspection reports off-site, as well as to support inspection findings in work papers and reports.

You may be requested to provide us with copies of key audit documents in advance to the inspection.

Following an inspection, you will have an opportunity to comment on the draft findings and clarify any errors or misunderstandings before the report is finalised. We will then consider the findings in the final report and decide whether further action is required. These findings also enable us to identify areas where you may require additional support and guidance as well as informing future policy decisions.

For more information, see Auditor inspection findings

Record keeping

Audit team leaders are required to keep records relating to an audit for five years from the date of the report of the audit. These records should be sufficiently complete and detailed to provide an understanding of the audit and the conclusions drawn from the audit evidence obtained.

If you are an audit team leader and you are leaving an employer, it is your responsibility to retain or have access to records relating to an audit for five years from the date of the report of the audit.

We recommend that you make your employer aware of this obligation and include in your employment contract the right to access documents after employment ceases, for a period of at least five years.

For more information on record keeping requirements, see section 4.2 of the Audit determination handbook.

Voluntary suspension

You may apply to suspend your registration if you need time away from the register. To do this, you must send us an email with your registration details and work contact details requesting the period of suspension and the date you would like the suspension to start. You may apply for a minimum of three months to a maximum of 12 months.

If we agree to a voluntary suspension, we will temporarily remove your details from the register and your requirements to maintain registration will be postponed until you return to the register. You must advise us of any changes to your circumstances or contact details while on suspension so we can contact you towards the end of your suspension period and discuss your registration needs.

Voluntary deregistration

If you no longer need your registration as a greenhouse and energy auditor you may apply for deregistration. To do this, you must send us an email with your registration details and work contact details requesting deregistration and the date from which you would like deregistration to take effect. If you have both Category 2 and Category 1 registration, you may apply to deregister both categories, or deregister as Category 2 auditor while retaining your Category 1 status.




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