1. Joint Seminar
Brussels 2017

2. Using the Work of the IA in SAI Financial Auditing
Martin Abbink Audit Methodology and Practices NCA
Ton Kok Manager Financial Audit NCA
Netherlands Court of Audit NCA

3. Content Vision on Added Value of Internal Audit
Modes of Cooperation SAI – IA and NCA - CGAS
Reliance on Internal Control and Internal Audit
CGAS and the Cooperation in the Field of the Financial Audit
Innovation and Mutual support
Challenges and Dilemmas
Questions?

4. Added Value of the Internal Audit
Added value IA for:
Line Management
Senior Management and Corporate Board
Audit Committee
SAI (external auditor)

5. IIA’s Internal Audit Capability Model
1. Initial
2. Infra-structure
3. Integrated (professional)
4. Managed (GRC oriented)
5. Optimizing
Starting development of internal audit activities
Dependent upon individual skills and competencies
Infrastructure established (IA unit, practices and procedures)
Continued reliance on individual skills and competencies
Professional practices established, CEA in place
Professional skills and ethics in line with standards
Quality control is in place
Added value to Governance and Risk Control
Board/Audit committee is owner
Part of organization's PDCA-cycle
Learning and improving
Profession and stakeholders oriented
Contributes to achieve strategic objectives
See:

6. Modes of Cooperation More Effectiveness 5. Optimizing
In terms of quality of audit information
5. Optimizing
Cooperation in professional practice
Cooperation in audit function
4. Managed (GRC oriented)
3. Integrated (professional)
Coordinated single audits
Ad hoc single audits
Alignment
2. Infra-structure
1. Initial
Sharing of findings
More Efficiency
In terms of saved audit costs and time

7. Cooperation Level NCA/CGAS
More Effectiveness
In terms of quality of audit information
5. Optimizing
Central Government Audit Service:
650+ FTE
ISA-proof certifying financial audits at ministries
Competence centre’s for financial auditing, ITC, compliance, etc.
ISA-proof Quality Framework
Annual Clarity Report
Annual review by NCA
NCA/CGAS Cooperation also on development audit methodologies
Cooperation in professional practice
Cooperation in audit function
4. Managed (GRC oriented)
3. Integrated (professional)
Coordinated single audits
Ad hoc single audits
Alignment
2. Infra-structure
Cooperation level NCA/CGAS
1. Initial
Sharing of findings
More Efficiency
In terms of saved audit costs and time

8. Reliance on internal control and internal audit

9. Central Government Audit Service
Capacity
A total of more than 650 employees with different backgrounds
About 60% works within the field of Financial Audit (accountancy). The remaining 40% works either in the field of IT-audit or Operational Audit
Functionally independent
Independent and objective activity aimed on realizing the organizational goals by providing assurance and consulting services (advisory task) to management on the quality of governance, control, accountability and supervision
Organizationally positioned at the ministry of Finance under the Secretary General (owner). The clients consist of all the ministries and subordinated bodies

10. Services of CGAS Statutory task
Financial audit of the annual financial reports of the ministries and subordinated bodies. Assurance is provided with respect to the reliability of the financial statements that are included in the ministerial annual reports (judgment)
Auditing financial management control systems within ministries and subordinated bodies (judgment)
Audits on demand
Investigations/audits and consulting assignments by request of management.
It concerns requests in the field of governance, control and accountability in which the focus is aimed at policy- and business-/operational processes (e.g. IT-systems).
Assignments on behalf of the European Union

11. Cooperation in the field of the Financial Audit
Review of the work of the IA
Risk analysis
Assessment of internal control
Review Audit plan (using ‘visuals’ as basis for exchange of views CGAS and NCA)
Review test of controls and test of transactions
Evaluating
Direct Access to IA’s working files (TeamMate) provided to NCA
Close cooperation requires mutual trust and respect

12. Innovation and mutual support
Cooperation in innovation: mutual support in development of new audit methods and techniques (process mining, continuous monitoring and auditing, blockchain audit challenges)
Enhancing the power of convincing the auditee of the necessary improvements in internal control, like adoption of the 3 lines of defence concepts at central government

13. Dilemmas and challenges
Open government: also CGAS reports are public: threat for the internal function as IA?
Is certifying internal audit and certifying external audit double costs for just one product?
Does certifying internal audit leads attention away from core business of the IA: support of line management and corporate governance (risk management and assessment of internal controls)?
Challenging process management due to longer lines: first finish of audit work CGAS then finish of review and audit work NCA

14. Evaluation and learning
All experiences, discussions, dilemma’s and challenges must be part of a cycle of evaluation and learning. The way to further improvements of the audit function at central government.
More improvements benefits all

15. Questions?