AUDIT PREPARATION PHASE
The preparation phase is critical to ensure that the audit is conducted in a structured, efficient, and contract-compliant manner. It establishes the technical, contractual, operational, and data foundation required for targeted risk assessment and focused fieldwork. The scope and sequencing of activities are illustrative and may be adapted depending on the specific contractual framework, asset characteristics, system environment, and audit objectives. Establishment of a secure SharePoint or equivalent data environment with controlled access shared with the Client, other non-op partners and Operator (restricted to Operator document provision) to facilitate efficient, traceable, and secure document exchange.
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Development of standardized audit templates for Information Requests (IRs), Audit Exceptions (AEs), logs, and reporting to ensure consistency, traceability, and defensible audit outcomes.
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Conduct of a pre-audit alignment meeting with the Client and non-operating partners to confirm audit objectives, key risk areas, coordination approach, and audit priorities.
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Preparation, alignment, and formal issuance of the audit announcement in accordance with contractual audit rights, notification requirements, and the agreed audit scope.
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Request of complete general ledger / single item transaction listings, including the minimum data set defined in the audit announcement, to enable structured and efficient data analytics.
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Conduct of a pre-audit meeting with the Operator to align on timelines, data availability, system access, audit logistics, and communication protocols.
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Organisation of the opening meeting and request for a structured Operator presentation covering key operational activities, asset portfolio, well locations, onshore bases, offices, and logistics hubs
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Request and review of previous audit reports, including discussion of Operator responses, remediation status, and unresolved or recurring audit issues.
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Request and review of approved budgets and AFEs, identification of partner non-approved WBS elements, and preliminary assessment of budget overruns and approval gaps.
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Request and review of OCM, TCM, and FCM presentations and minutes to assess governance arrangements, decision-making processes, and cost approval practices.
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Request of joint venture billings and cash calls to establish a financial baseline for reconciliation, cash flow analysis, and working capital assessment.
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Preparation, enrichment and analysis of general ledger and transaction data, including account and WBS descriptions, document types, vendor details, billing categories, neutral postings, and defined materiality thresholds. Where SAP access or supporting documentation is not available on site, a representative transaction sample is defined and requested from the Operator.
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Preparation of internal cost matrices, including allocation logic, rate verification, and a preliminary assessment of compliance with JOA and Accounting Procedure provisions.
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Creation of detailed work-split spreadsheets for all auditors, clearly separating direct third-party expenditures from internal and affiliate cost categories, reflecting samples if applicable.
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Development of a comprehensive operational understanding through review of regional asset portfolios, operational activities, GPS maps, P&IDs, DDRs, well reports (if already provided) vessel and rig routes, rig programmes(including mob/demob and rig intake costs), and development plans for processing plants and pipelines (if already provided) to inform risk assessment and audit focus.