Auditing in the Oil and Gas Industry

Why Select this Training Course?

Auditing within the oil and gas sector entails scrutinising financial records, operational processes, and adherence to regulations in companies involved in oil and gas exploration, production, refining, and distribution. Auditors verify financial accuracy, assess risks, ensure regulatory compliance, and offer suggestions for enhancements. Auditing in the oil and gas industry faces challenges due to complex regulatory frameworks, evolving technological landscapes, and diverse operational environments. Ensuring compliance, risk mitigation, and accurate financial reporting amidst fluctuating market conditions and geopolitical uncertainties presents ongoing challenges for auditors in this sector.

This Rcademy Auditing in the Oil and Gas Industry course aims to equip participants with the knowledge and skills necessary for auditing practices in the upstream oil and gas sector. This course will highlight proficiency in the most recent editions of ISO 9001, ISO 14001, and ISO 45001 standards. Additionally, participants will learn to develop and implement a structured approach for conducting audits on joint ventures and Production Sharing Contracts (PSCs) in the upstream oil industry.

Why is accounting important in the oil and gas industry?

Oil and gas accounting is a specialised discipline essential for accurately tracking and reporting financial activities in the oil and gas industry. It ensures regulation compliance, transparent financial reporting, and strategic decision-making. Oil and gas accounting is crucial for asset valuation, risk management, and sustainability. Key aspects include reserve accounting, revenue recognition, exploration costs, and DD&A. Reporting compliance ensures adherence to regulations and tax standards.

What are key audit matters in the oil and gas industry?

In the oil and gas industry, key audit matters (KAMs) refer to significant areas in financial statements requiring meticulous scrutiny by auditors due to their intricacy, judgment, or potential influence on financial reporting. These encompass critical aspects like reserves estimation, revenue recognition, exploration and development costs, depreciation, joint ventures, hedging, regulatory compliance, taxation, impairment, and environmental liabilities. KAMs in oil and gas audits underscore the importance of meticulous examination to uphold financial transparency and compliance.

Who Should Attend?

The Rcademy Auditing in the Oil and Gas Industry course is specially curated for:

• Oil and gas professionals tasked with managing financial transactions in the industry.
• Auditors who are tasked with scrutinising and ensuring standardised financial practices in the oil and gas, petrochemical and energy sectors.
• Regulatory compliance officers
• Managers in the oil and gas sector
• Legal advisors and consultants
• Government officials who are tasked with oil and gas activities regulations.
• Corporate investors and analysts tasked with financial health assessment of oil and gas companies.

What are the Course Objectives?

The primary objectives of this Rcademy Auditing in Oil and Gas Industry course are to equip participants to:

• Learn how to enforce and ensure compliance with financial regulations in the oil and gas industry.
• Understand all ISO 9001, ISO 14001 and ISO 45001 standards and their applicability in the oil and gas industry.
• Plan, conduct and report issues detected from auditing to management.
• Verify financial reports’ accuracy and consistency.
• Review internal controls and compliance effectiveness.
• Detect and trace financial fraud accurately to the source.
• Promote financial accountability and transparency in the oil and gas industry.

How will this Course be Presented?

This Rcademy Auditing in the Oil and Gas Industry is participant-based and curated specifically to meet their expectations and grow their skills and knowledge. The training will be delivered using different approaches and techniques that ensure learning efficiency for the participants. Experts in the field with years of practice and experience will deliver the course, ensuring proficiency, quality and consistency. The modules are designed based on extensive research on auditing in the oil and gas industry.

This Rcademy Auditing in the Oil and Gas Industry provides theoretical and practical learning approaches by providing lecture notes, slides on the subject, real-life scenarios, and lecture notes. Participants will also participate in seminar workshops, quizzes, presentations, and constant feedback on the lessons learned to ensure their satisfaction.

What are the Topics Covered in this Course?

Module 1: Introduction to Oil and Gas Industry Auditing

• Overview of auditing principles and practices
• Introduction to oil and gas industry structure
• Key stakeholders and regulatory bodies
• Audit planning and scope definition
• Auditor independence and ethics
• Industry-specific audit challenges
• Case studies and best practices

Module 2: Regulatory Compliance Auditing

• Overview of oil and gas broad regulations
• Regulatory reporting requirements
• Health and safety compliance audits
• Permitting and licensing audits
• Compliance with production-sharing agreements
• Audit of government royalties and taxes
• Compliance with international standards (e.g., ISO, API)

Module 3: Financial Reporting Audits

• Overview of financial reporting standards (e.g., IFRS, US GAAP)
• Audit of revenue recognition
• Audit of exploration and development costs
• Audit of reserves estimation and disclosures
• Audit of depreciation, depletion, and amortisation (DD&A)
• Asset impairment testing
• Audit of joint venture accounting
• Audit of financial statement disclosures

Module 4: Reserves Estimation Audits

• Overview of reserves estimation methods (e.g., SEC, SPE)
• Audit of reserves booking process
• Data verification for reservoir engineering
• Evaluation of reserves classification
• Audit of reserves reconciliation process
• Review of reserves disclosure in financial statements
• Audit of reserves audits by third-party experts
• Assessment of reserves forecasting methodologies

Module 5: Operational Audits

• Audit of drilling and production operations
• Audit of supply chain management
• Assessment of operational efficiency and effectiveness
• Audit of asset integrity and reliability
• Evaluation of operational risks and controls
• Audit of inventory management
• Audit of transportation and logistics
• Assessment of operational performance metrics

Module 6: Risk Management Audits

• Overview of risk management frameworks
• Identification and assessment of operational risks
• Audit of risk management policies and procedures
• Evaluation of risk mitigation strategies
• Audit of commodity price risk management
• Assessment of geopolitical risks
• Audit of financial risk management
• Review of enterprise risk management practices

Module 7: Environmental Audits

• Overview of environmental regulations
• Audit of environmental management systems (EMS)
• Compliance with air and water quality regulations
• Assessment of waste management practices
• Audit of spill prevention and response plans
• Evaluation of environmental liabilities
• Review of environmental remediation activities
• Assessment of sustainability reporting

Module 8: Joint Venture Audits

• Overview of joint venture structures in the oil and gas industry
• Audit of joint operating agreements (JOAs)
• Verification of joint venture accounting records
• Assessment of joint venture financial performance
• Audit of joint venture billing and revenue sharing
• Evaluation of partner relationships and disputes
• Review of audit rights and responsibilities
• Assessment of joint venture governance practices

Module 9: Taxation Audits

• Overview of tax regulations affecting oil and gas companies
• Audit of tax compliance and reporting
• Assessment of transfer pricing arrangements
• Review of tax incentives and credits
• Audit of tax provisions and accruals
• Evaluation of tax planning strategies
• Assessment of tax risks and exposures
• Audit of international tax issues (e.g., transfer pricing, BEPS)

Module 10: Technology and Data Analytics in Auditing

• Overview of auditing tools and techniques
• Use of data analytics in audit planning and execution
• Audit automation and workflow management
• Application of Machine Learning and Artificial Intelligence
• Audit of IT controls and cybersecurity
• Review of audit software solutions
• Assessment of emerging technologies in auditing
• Training on using technology for auditing in the oil and gas industry

Module 11: Emerging Trends

• Conducting Predictive Analytics using Machine Learning and AI
• Use of Robotic Process Automation (RPA) for Routine Auditing Task
• Cybersecurity Audits (IT and OT Integration)
• Big Data Analysis
• Remote and virtual auditing in Oil and Gas
• Blockchain for transparency and traceability
• Enhanced safety and process audits
• Sustainability and climate risk audits