David H.

As another 30 June deadline looms, finance professionals across the Queensland public sector are beginning to prepare financial statements for their entities. Staying up-to-date and understanding any changes to standards and emerging issues is imperative.

In late February, the Queensland Audit Office (QAO) held our 2022 Technical audit update, where we discussed the changing accounting standards, key findings and insights from our 2020–21 audits, our new internal controls assessment model and our dashboards.

We continue to appreciate Queensland Treasury’s valuable involvement in this event, who provided an overview of climate change reporting and what to look for in this year’s Financial Reporting Requirements (FRRs).

The major takeaways from our event are highlighted below.

Since our technical audit update, we have published a blog on how to account for damage arising from the recent flooding events in Queensland.


Technical and accounting standards update

SaaS/Cloud computing costs

The main accounting issue to be aware of this year is the clarification on how to account for cloud computing – or software-as-a-service (SaaS) arrangements. The clarification comes from the IFRS Interpretations Committee’s (IFRIC’s) agenda decision Configuration or Customisation Costs in a Cloud Computing Arrangement (April 2021). 

This issue arose very late last financial year, and many entities deferred implementation to 2021–22. In our July 2021 blog, Configuration or customisation costs in a cloud computing arrangement, we discussed the background to the issue, impact on financial statements, and implications for 30 June 2021 reporting.

The clarification of when to capitalise or expense SaaS costs will depend on the circumstances. You:

  • may be able to continue capitalising some costs for SaaS-related and other information technology (IT) projects
  • may be required to reclassify some previously capitalised costs as a prepayment you will expense over time
  • must expense the remaining costs as you incur them.

To capitalise costs, you need to have an intangible asset. During our technical audit update, we discussed the concept of ‘show me the code’ to demonstrate that you have control over the computer code, or the perpetual licence.

We also discussed various issues to consider (which are covered in our previous blog articles), and the need to account for the change retrospectively.

Other reporting changes

Other changes to the FRRs will cover:

  • climate-related risk disclosure and financial reporting – how this affects your financial reporting, and how you should link to whole-of-government initiatives
  • changes to what is known as Tier 2 reporting – changes from RDR (Reduced Disclosure Requirements) to SDS (Simplified Disclosures) that may involve a reduction in some disclosures, and an increase in other disclosures. The Future Bay illustrative financial statements will be updated for the changes.

We plan to issue a more detailed blog article when the FRRs have been released.


Insights from QAO’s 2020–21 financial audits

Through our recent reports to parliament on the results of our financial audits, we identified a number of challenges and areas of focus for state and local government entities. To read our latest reports and supporting interactive data visualisations, please see our website at

Some key themes from our 2020–21 results of financial audit reports to parliament include:


Internal controls assessment model

While there is no change to the requirement for us to assess internal controls relevant to the audit, or report any deficiencies, we are changing the way we make and report assessments of those internal controls.

We will be reporting against 4levels of maturity across 10 elements.

Find out more in our recent blog, Our new annual assessment tool for internal controls is now available, and the related fact sheet.


QAO’s new interactive dashboards

In late 2021, we published 2 new dashboards with useful and interesting information for all entities, parliament, and the public. Both dashboards will be updated over time, as we continue to table new reports to parliament.

QAO Queensland dashboard

This dashboard helps you understand more about the area or region you live in and the public services you receive. You can search your address to view important financial information about public sector and local government entities, and interesting demographic information.

The data is sourced from our reports to parliament, audited financial statements and a variety of reliable public sources.

View our QAO Queensland dashboard

Status of Auditor-General recommendations dashboard

In November last year, we tabled our report 2021 status of Auditor-General’s recommendations (Report 4: 2021–22) and published a corresponding dashboard. Our report captures entities’ self-assessed progress in implementing our performance and assurance audit recommendations. It shares insights on common challenges and opportunities facing the public sector and where entities can improve their systems and practices.

Our Status of Auditor-General’s recommendations dashboard allows you to explore by area of interest or responsibility how entities have self-assessed their progress in implementing our recommendations. You can search by year, report, entity, and recommendation implementation status. Currently, the dashboard includes recommendations from our 2015–16 to 2017–18 reports, but this will be expanded when we table our 2022 report later this year.

View our Status of Auditor-General's recommendations dashboard


Further resources

The 2022 Technical audit update presentation is available on our website.

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