1. Working Group on Quality Assurance Overview of the results achieved Ljerka Crnković Jean-Pierre Garitte Prague, March 22, 2016

2. Content 1.QA WG objectives 2.The way of achieving results 3.Final result of QA WG 4.Quality Assessment Guide for Public Sector Internal Audit - A toolkit for quality improvement 5. Conclusion

3. 1. QA WG - objectives Quality assurance working group intends to help internal auditors to: understand how to apply the International Standards and best practices to improve the quality of the internal audit practice develop a solid understanding of the process used to complete internal and external assessments of an internal audit function discover proven quality assessment tools and techniques learn from country experience on QA methodology - explore the recommended internal and external quality assessment approaches and identify the best approach for their own organization to ultimately improve the overall quality of internal audit in all the PEM PAL member countries

4. 2. The way of achieving results Genesis of QA WG Skopje, MacedoniaOctober 6-8, 2011 Workshops Budapest, HungaryApril 17-20, 2012 Lviv, UkraineSeptember 24-27, 2012 Tbilisi, GeorgiaJanuary 28-30, 2013 Yerevan, ArmeniaNovember 12-15, 2013 Budva, MontenegroJanuary 28-30, 2014 Bucharest, RomaniaDecember 2-4, 2014 Yerevan, ArmeniaOctober 13-16, 2016 Study visit Warsaw, PolandNovember15-16, 2012

5. 3. Final Result of QA WG Good Practice Internal Audit Manual Addendum to the Good Practice Internal Audit Manual Template – Part 4 Internal Control Quality Assessment Guide for Public Sector Internal Audit - A toolkit for quality improvement

6. 4. Quality Assessment Guide for Public Sector Internal Audit - A toolkit for quality improvement Content Preface Acknowledgements Acronyms and Abbreviations 1.Introduction 2.Internal Quality Assessment Performed by the Internal Audit Unit 2.1. Ongoing monitoring 2.2.Periodic self-assessment by the internal audit unit 2.3.Audited entity survey 3.External Quality Assessment Performed by the Central Harmonization Unit 4.Internal Quality Assessment of the Central Harmonization Unit 5.Independent External Quality Assessment Performed by an External, Independent Party

7. 4. Quality Assessment Guide for Public Sector Internal Audit - A toolkit for quality improvement Annexes Annex 1 Checklist to Assess Quality Criteria during Ongoing Monitoring of the Internal Audit Activity Annex 2 Checklist to Assess Quality Criteria during the Internal Quality Periodic Self- Assessment Annex 3 Audited Entity Survey Template Annex 4 External Quality Assessment by the Central Harmonization Unit Annex 5 Checklist to Assess Quality Criteria during Internal Assessment of the Central Harmonization Unit

8. 4. Annex 4 - External Quality Assessment Performed by the Central Harmonization Unit 4.1. Questions and review steps for assessment under each Standard 1.Standard 100Purpose Authority and Responsibility 1-8 2.Standard 1100Independence and Objectivity 9-27 3.Standard 1200Proficiency and Due Professional Care 28-37 4.Standard 1300Quality Assurance and Improvement 38-48 5.Standard 2000Managing the Internal Audit Activity 49-67 6.Standard 2100Nature of Work 68-75 7Standard 2200Engagement Planning 76-84 8.Standard 2300Performing the Engagement 85-91 9.Standard 2400Communicating Results 92-96 10.Standard 2500Monitoring Progress 97-98 11.Standard 2600Communicating the Acceptance of Risks 99

9. 4. Annex 4 - External Quality Assessment Performed by the Central Harmonization Unit 4.2. Assessment criteria for assessing each question under the Standards Two types of assessment criteria Key assessment criteria non-compliance with these criteria immediately results in a negative score, which heavily impacts the final assessment Secondary assessment criteria non compliance with a secondary assessment criteria has an impact on the final assessment if there are many instances of non-compliance with secondary criteria

10. 4. Annex 4 - External Quality Assessment Performed by the Central Harmonization Unit

12. Key assessment criteria (2 questions) Secondary assessment criteria (6 questions ) Standard 1000 (8 questions) 4.3. Scoring system for each Standard

13. 4. Annex 4 - External Quality Assessment Performed by the Central Harmonization Unit 4.4. Total score for all Standards Helps to visualize what the areas are that require attention The scores do not only relate to the Internal Audit Units and their Heads, but also to the Institution failing to implement internal audit as expected by law and good practices –This should be made very clear when expressing a final opinion on the quality of the internal audit function Gives more weight to the ISPPIAs 1100, 1200, 2000, 2200 and 23 00 –this implies that a strong non-conformity (i.e. red ISPPIA score) with these specific ISPPIAs will immediately result in an overall negative score and thus final resultt

14. 4. Annex 4 - External Quality Assessment Performed by the Central Harmonization Unit Standard 1000 Standard 1100 Standard 1200 Standard 1300 Standard 2000 Standard 2100 Standard 2200 Standard 2300 Standard 2400 Standard 2500 Standard 2600

15. 4. Annex 4 - External Quality Assessment Performed by the Central Harmonization Unit The objective of external quality assessment performed by the Central Harmonization Unit is to show the Internal Audit Units where the areas are that deserve due care but not to score the various Internal Audit Units!

16. 5. Conclusion Our vision for the future –to put the common methodology into practice