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Practice Guide to Auditing Oil and Gas Revenues


The Planning Phase

The Planning Phase

At this stage of the audit process, it is assumed that auditors have decided to include financial assurances for the remediation of oil and gas wells and facilities in their audit. However, they may not yet know exactly which programs and controls to audit, nor which audit objectives and criteria to use in their detailed audit plan.

This section of the Practice Guide is intended to help auditors answer these questions. It is organized according to the key actions and decisions that need to be made when conducting detailed planning for the audit:

In jurisdictions where the government has opted to use a general remediation fund to manage liabilities associated with decommissioned oil and gas wells, the risks and controls will differ to some extent from situations where a financial assurance program is in place. These differences are discussed in the section on Auditing Remediation Funds.

Finally, in jurisdictions where only a few large oil and gas companies operate under Production Sharing Agreements (PSAs) negotiated with the government, the rules governing the decommissioning of oil and gas wells may be defined in the PSAs themselves. In such cases, the auditors should use the PSA requirements as the basis for developing their audit plans.