1. Internal Audit in the Public Sector in North Macedonia - First steps, achivments and further chellenges -
Mite Mitevski,
Head of Central Harmonization Unit for Internal Audit,
Public Internal Financial Control Department,
Ministry of Finance, Republic of North Macedonia 
April 9, 2019

2. content General developments and IA framework IA tools and methods
Further challenges (around tables work)

3. General developments and IA framework
2009
Fully decentralized model on the organization of the Internal Audit
Law on Public Internal Financial Control
2004
Central Internal Audit Department, MoF
Unit for Harmonization at IA Central IA Unit
Law on Internal Audit in the Public Sector
2000
Central Internal Audit Unit, within the Treasury Department, MoF
Budget Law
Rulebook for the manner of performance of the Internal Audit (2003)

4. General developments and IA framework
INTERNATIONAL STANDARDS FOR THE PROFESSIONAL PRACTICE OF INTERNAL AUDITING (STANDARDS)
PIFC
Law
INTERNAL AUDIT MANUAL
RULEBOOK FOR CODE OF ETHICS OF THE INTERNAL AUDITORS
RULEBOOK FOR THE MANNER OF PERFORMANCE OF THE INTERNAL AUDIT AND THE MANNER ON REPORTING FOR THE AUDIT
RULEBOOK FOR THE CHARTER FOR INTERNAL AUDIT

5. General developments and IA framework
Central Internal Audit Department
Central Harmonization Unit for Internal Audit
Central Harmonization Unit
Central Harmonization Unit for Financial Management and Control

6. Central Harmonization Unit
General developments and IA framework
MAIN TASKS
Preparation of laws and by-laws in; the field of PIFC;
Preparation of methodology and working standards;
Coordination of the trainings;
Coordination during the establishment and the development of the internal financial control system;
Establishment and maintenance of databases for the internal audit units and the adopted charters;
Establishment and maintenance of registry of certified internal auditors
Supervision of the quality of the financial management and control system;
Supervision of the quality of the operations of the Internal Audit Units;
Preparation of an Annual Report on the Functioning of the Public Internal Financial Control System
Central Harmonization Unit

7. General developments and IA framework
Criteria for establishing Internal Audit function:
Intеrnаl Аudit Unit shall be mandatory established
(The Раrliаmеnt, the National Bank, the General Secretariat of the Government of the Republic of North Macedonia…);
Intеrnаl Аudit Unit shall be also mandatory established as in all public sector entities, which average annual budget/financial plan was above Denar 50 million in the last three years and
Public sector entities, which average annual budget/financial plan is under Denar 50 million in the last three years
(on contract basis with other IAU/ or auditor from the the register of internal auditors)

8. General developments and IA framework
Current situation
- Central level
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Established internal audit units 24 35 46 58 64 71 73 76 78 84 88
Internal auditors 52 68 81 90
111
120
133
137
142
145
146
144
Heads of Internal Audit Units / 27 34 44 47 51 53 54 55

9. General developments and IA framework
Current situation
- Local level
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Established internal audit units 17 32 40 49 59 64 65 71 70
Internal auditors 15 27 33 35 44 52 60 67 68 69 76
Heads of Internal Audit Units / 18 19 22 21 20 23
Certified internal auditors
- 86 internal auditors

10. Internal Audit tools and methods BASED ON RISK ASSESSMENT
Strategic and Annual Planning
Strategic Plan for Internal Audit 
BASED ON RISK ASSESSMENT
Annual Audit Plan
TYPES OF INTERNAL AUDIT
Financial audit;
Compliance audit (regularity);
Audit on the internal control systems;
Performance audit (execution) ; and
IT audit

11. Internal Audit tools and methods
INDIVIDUAL AUDIT ENGAGEMENT
PHASE OF PREPARATION AND PLANNING
LETTER OF AUTHORIZATION
PRELIMINARY RESEARCH
INITIAL MEETING
Review of the permanent audit dossier and the reports from previous Audits
Review of strategic and operational plans and organograms;
Review of the budget
Initial discussions with the heads of the audited area;
Review of the relevant legal, secondary, internal and other acts.
presents the audit team;
shows the audit objective and gives short overview of the approach;
questionnaire for the initial meeting;
list of documents that should be submitted by the audited entity.
Copy of the Charter for Internal Audit is delivered at the auditee representatives

12. Internal Audit tools and methods PHASE OF PREPARATION AND PLANNING
INDIVIDUAL AUDIT ENGAGEMENT
PHASE OF PREPARATION AND PLANNING
AUDIT PLAN
AUDIT PROGRAM
KEY POINTS
General data for the audit;
Short description of the system/process;
Audit objectives, Scope of audit and priorities;
Approach and audit techniques and
Scheduled dates for completion
Objectives of the system/process/activity;
Control objectives;
Risks;
Identified controls;
Evaluation of identified controls vs risks;
Compliance and content tests;
Working document and
Conclusion/comment

13. Internal Audit tools and methods
INDIVIDUAL AUDIT ENGAGEMENT
COLLECTING OF EVIDENCE
SAMPLING
MOST USED METHODS
DETERMINING THE SAMPLE SIZE
FIELD WORK
”judgement sampling”;
Simple Random Sampling;
Interval selection;
Stratified Random Sampling
Computer sampling
Population size
Population variability

14. Internal Audit tools and methods
INDIVIDUAL AUDIT ENGAGEMENT
AUDIT METHODS
observation;
confirmation;
verification;
researching;
analysis; and
evaluation
Compliance tests
(documented check
whether the established
controls are adequate
and functioning properly)
Content tests
(check whether the not
functioning of the controls
brought to error/loss)
FIELD WORK
Test record
Record of Audit Findings

15. Internal Audit tools and methods PERMANENT AND CURRENT AUDIT FILE
INDIVIDUAL AUDIT ENGAGEMENT
REPORTING
DRAFT REPORT
INTERIM REPORT
FINAL REPORT
ACTION PLAN
PERMANENT AND CURRENT AUDIT FILE

16. Internal Audit tools and methods REPORT FOR PERFORMED AUDITS
HORIZONTAL ISSUES
FOLLOW UP
ACTIVITY
REPORT FOR PERFORMED AUDITS
OF THE INTERNAL AUDIT
RULEBOOK
FOR THE FORM AND CONTENT OF THE REPORTS AND THE STATEMENT FOR THE QUALITY AND THE CONDITION OF THE INTERNAL CONTROLS FROM
THE ANNUAL FINANCIAL REPORT
QUARTERLY REPORT

18. Further challenges (around tables work)
PROCESS OF REORGANIZATION OF THE INTERNAL AUDIT UNITS
IMPLEMENTATION OF NATIONAL CERTIFICATION OF INTERNAL AUDITORS
QUALITY ASSURANCE AND IMPROVEMENT PROGRAM (QAIP)