Auditing in the Oil and Gas Industry

Audit Principles, Audit Concepts, and Internal Audit

• Audit origins, purposes, and types
• Audit concepts
• Internal audit

The first day will to set the scene by providing a generic definition of audit, while stressing the importance of independence, as well as the importance of examining different approaches to risk assessment and audit planning.  Participants will complete a number of practical exercises to illustrate the key learning outcomes.

Audit Techniques

• Audit preparation and planning
• Risk assessment
• Testing and sampling
• Interviewing techniques
• The audit report

Some of the key techniques associated with the examination of system processes will be explained before participants learn about considering how to test internal controls and selecting an appropriate sample of transactions to be audited.  The importance of corporate governance will be addressed.  The day will close with some examples of operational auditing techniques.

The Joint Venture Audit Process

• The audit cycle
• Joint venture accounting procedure and audit rights
• Multi-venture and contract audits 

Participants will start by examining issues associated with auditing a contractor before focusing on the importance of joint venture audit and some of the issues that arise when conducting such audits.

Joint Venture Operations and Typical Major Audit Issues

• The cash account and areas requiring review at audit
• Understanding unitization and redetermination and their implications for the joint venture audit
• Audit of general and administrative costs
• Review of Parent Company Overhead (PCO) provisions contained in the accounting procedure
• Audit of various cost categories 

The focus on joint venture audits will continue with the emphasis on the major areas of expenditure and the audit issues that frequently arise.  A number of examples and exercises will be conducted to illustrate the main learning outcomes.

General and Administrative Costs, Case Study, and PSC Audits

• General and administrative costs, allocation to joint ventures, and parent company services
• Joint venture case study
• How a PSC audit differs to a joint venture audit 

Participants will put into practice the principles that they have learned during the course by participating in a case study.  They will conduct an audit and then summarize their key findings.  Participants will also learn to appreciate the differences between auditing a PSC and joint venture operations.