Afrosai- E Is Updating its Audit Guideline for Extractive Industries

The currently in force AFROSAI-E guideline on “Audit Considerations For Extractive Industries” was updated from a 2013 version in the year 2015. The update resulted in some sections of the 2013 version being deemed irrelevant after implementation in the region, such as detailed audit procedures, being removed. Some of the sections where re-written in order to clarify that the principles applied to oil and gas are equally applicable to mining. With the passage of time as the AFROSAI-E region matures in the audit of the EI sector, and in line with the founding principles of AFROSAI-E on incessant innovation – an updated version of the guideline is required.

The growth of the Extractive industries sector in Africa is escalating. This sector continues to present a number of challenges for the public sector. The regulatory framework that is needed to ensure a sustainable development of the sector, a fair share of income and an equitable distribution of that income, is complex and challenging. It has been noted that the current guideline needs to be conscious of some of the latest developments, trends and initiatives in the extractive industries post the industry’s “super cycle”. Under the current and previous versions of this guideline, the AFROSAI-E region has embarked on several audit projects in the EI sector whose indelible experiences need to be formally documented and catalogues as good practice. Currently there is no single platform which exists as such a body of knowledge. As audit practice has revealed with time, the guidelines have existed exclusively as informers of knowledge to the audit teams, it has been noted that the guidelines can also be redesigned into both an informer and an auditing tool for the SAIs.

It is the developer’s opinions that if the above needs are addressed, this guideline will be once again positioned to continue enhancing the institutional capacity of SAIs in understanding how the Extractive Industries sector can be organized in petroleum and mineral producing countries and to assist auditors in performing audits in a more efficient and effective manner.

The desired objectives to address the needs stated above are to update the current AFROSAI-E Extractive Industries guideline to:

  1. Inform the users on the latest developments, trends and initiatives in the sector;
  2. Show case progress in the AFROSAI-E region experiences through giving real SAI examples;
  3. Position the guideline as the backbone for development of an AFROSAI-E, e-learning program on EI sector audits;
  4. Ensure the guide is both an informer and a tool for SAI in the EI sector.

By Nikeziwe Khanyile – Technical Assistant Manager /AFROSAI-E

Comments are closed.