Compliance Audit Subcommittee Reporting Work Plan Copenhagen, Denmark 6th of May 2010
a year to remember
40 years later – also a year to remember
Why Compliance Audit is important – the extended perspective Provide guidance for audits of financial statements in the public sector, including; concerns that public funds are used for the intended purposes principles of sound management are followed in the execution of the budgets
Compliance Audit Guidelines - integrated approach with Financial Audit Guidelines Compliance Audit guidelines developed within the same structure Cross-references made to other relevant ISSAIs Issues on compliance audit dealt with in the context of auditing of financial statements
Definition of Compliance Audit Deals with the degree to which the audited entity follows rules, laws and regulation, policies, established codes, or agreed upon terms and conditions, etc. May cover a wide range of subject matters. The purpose is to provide assurance to intended users about the outcome of the evaluation or measurement of a subject matter against suitable criteria
Scope and nature of Compliance Audit the mandate of the SAI determines whether the SAI carries out compliance audit activities or not The subject matters of compliance audits are wide ranging and may vary significantly from one audit to the next the subject matter and scope of the compliance audit may be based on Formal criteria Less formal criteria
Scope and subject matter Requirements in the audit mandate or relevant laws and regulations Previous instances of non-compliance Findings and recommendations by other auditors Risk assessments indicating specific areas of non-compliance Public interest or expectations Specific areas of significant legislative focus Requests by legislative bodies, funding agencies or donors
Compliance Audit Concept Legislature decisions and premises Regularity Propriety Criteria Financial transactions Activities Results Financial Reports Performance Disclosures Subject Matter Information Authorities “Executing of the Budget” Compliance?
The Compliance Audit Guidelines - two main perspectives ISSAI General introduction to compliance audit ISSAI deals with compliance audit performed separately from the audit of financial statements, for example as a separate audit task or related to performance audit ISSAI deals with compliance audit related to the audit of financial statements Written as consistent, stand- alone documents
Important issues Resonable vs limited assurance Regularity vs propriety Opinon on compliance Short form and long form reporting Materiality
Compliance Audit Process Docu mentation, Communication, Quality Control Initial conciderations Planning the audit Performing the audit and gather evidence Evaluating evidence & forming Conclutions Reporting
Court of Accounts issues
2009 – a year to remember Transparency Accountability Stewardship Good governance Compliance Audit
Work plan Raising awareness, implementation and maintenance of the Guidelines for Compliance Audit will be the focus of the Compliance Audit Subcommittee in the work plan The implementation and maintenance of the guidelines will focus on the development and use of the concepts in SAIs Capacity building and cooperation with other bodies on these matters are an important element in the implementation of the Compliance Audit Guidelines
Work plan CAS has organized the work ahead in three different working groups within the committee; Court of Accounts issues (see item 6 above) Awareness/implementation Maintenance of the guidelines, related to issues as: limited vs. reasonable assurance negative assurance materiality monitoring need for application material