New CCAF Guidance on Auditing the Oil and Gas Sector

CCAF is a Canadian not-for-profit organization dedicated to promoting and strengthening public sector performance audit, oversight and accountability in Canada and abroad. In 2013, we initiated a program to develop new performance audit methodology tools in the form of a series of Practice Guides. In October 2016, we released our fourth publication in this series: Practice Guide to Auditing Oil and Gas Revenues and Financial Assurances for site remediation.

CCAF

This new Practice Guide is the result of a year of research and consultations with experienced performance auditors from Canada and several WGEI member countries. It provides information and guidance that will help auditors to complete the successive steps involved in planning, conducting, and reporting the results of an audit of the oil and gas sector. This guidance will be especially useful to auditors who wish to audit:

  • oil and gas revenues, including royalties, fees, bonuses and penalties; and
  • the financial assurance systems put in place by governments to manage the potential liabilities that may arise from the remediation of oil and gas extraction sites.

In addition to examples of audit questions, audit objectives and audit criteria, the Practice Guide includes information on the following topics:

  • the range of government responsibilities in the oil and gas sector.
  • the typical life cycle of oil and gas projects;
  • the different types of revenues that governments can derive from oil and gas extraction;
  • how financial assurance requirements help governments to manage potential financial liability associated with the remediation of oil and gas extraction sites; and
  • recent performance audits on the oil and gas sector from different countries.

A printable version of our latest Practice Guide has been made available on the WGEI website and can be accessed by clicking here. For any questions or comments on this document, please contact us at info@ccaf-fcvi.com.

To complement our guidance on the oil and gas sector, we are currently finalizing work on a new Practice Guide that will cover audits of mining sector revenues and financial assurances. We expect to conduct Canadian and international consultations on this new document in February and March 2017, with publication following in the spring. Should your office be interested in providing input on this upcoming Practice Guide, please contact us at info@ccaf-fcvi.com and we will be pleased to send you a copy of our consultation draft.

By releasing new guidance on auditing extractive industries, CCAF aims to help supreme audit institutions build their capacity in this regard and to contribute to WGEI’s efforts to develop tools to address the common challenges involved in auditing extractive industries.

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