1. Audit Directive 2008 Consultation with SCoAG

2. Audit Directive - 2008 Objectives To complete the 2007 process of training on auditing standards To formally consult on the auditing standards for the 2007/8 financial years (PFMA and MFMA) To finalise the 2008 Audit Directive

3. Audit Directive - 2008 Types of audits Performance Audit Special auditsInvestigations Regularity Audit (financial, compliance and AOPI)

4. Audit Directive - 2008 Types of audits Regularity Audit (financial, compliance and AOPI) Performance Audit Special auditsInvestigations Full suite of IFAC audit pronouncements Other Basic auditing principles of INTOSAI standards AND INTOSAI guidelines on performance auditing Basic auditing principles of IFAC standards AND own development based on best practices

5. Audit Directive - 2008 IFAC Auditing pronouncements Code of ethics International Standard on Quality Control International Framework for assurance engagements Audits and reviews of historical financial information Assurance engagements other than audits or reviews… International Standards of Auditing International Audit Practice Statements International Standards on Review Engagements International Review Engagement Practice Statements

6. Audit Directive - 2008 Communication with those charged with governance Audit findingAudit evidence Audit response / report Supervision, review and quality assurance Audit findings model Audit documentation PUBLIC DOCUMENT

7. International Standards of Supreme Audit Institutions Working group Financial Audit Guidelines Subcommittee INTOSAI Level 1: Founding Principles Level 4: Auditing guidelines Level 3: Fundamental auditing principles Level 2: Prerequisites for the functioning of SAIs Lima Declaration ISSAI1 ISSAI 1000-2999 100-400 ISSAI 10-30 INTOSAI Financial Audit Guidelines INTOSAI Auditing Standards INTOSAI Code of Ethics

8. Audit Directive - 2008 ISA versus ISSAI Framework launched in 2007 (Mexico) Final ISSAIs = ISA + Practice note Over time, one set of sector-neutral auditing standards Completion in 2010 –Interim status – as guidelines –SA interim position, ISA adoption with ISSAI context SA involvement –Panel of experts (confirmed) –Member of sub-committee (proposed)

9. Audit Directive - 2008 ISSAIs Founding principles –Lima Declaration Prerequisites –Independence –Transparency and accountability –Code of ethics

10. Audit Directive - 2008 ISSAIs Auditing principles –Basic principles –General (planning) standards –Fieldwork standards –Reporting standards (Note – 2010 possible change-over)

11. Audit Directive - 2008 ISSAIs Financial audit guidelines –Implementation guidance –Regularity Audit –Performance Audit –Compliance Audit –International / environmental / privatisation / IT audit / public debt / disaster aid

12. Audit Directive - 2008 ISSAIs Governance –Reporting on internal control –Other

13. Audit Directive - 2008 Current developments in profession Enhancement of decisions / application of materiality and sampling Enhancement of ISA 240 – fraud considerations (part of regularity but could trigger investigations) Better alignment of IS audit requirements in regularity process Pilot projects on transversal audits

14. Audit Directive - 2008 AOPI - Strategy YearApproachReport 2005-06Understanding of performance information (PI) environment Existence, consistency and format Compare to source Deficiencies in management report Emphasis of matter in audit report 2006-07Understanding of internal controls regarding PI Document system descriptions Existence, consistency, format, compare to source Deficiencies in management report Audit report – agreed upon procedures under the heading of “other reporting responsibilities” 2007-09Same as above with more substantive procedures, lifting the bar in line with readiness and progress at audited entities Same as above 2009-10Audit procedures relevant to providing reasonable assurance Deficiencies in management report Separate audit opinion on PI

15. Audit Directive - 2008 Performance auditing AGSA to adopt ISSAIs Refer ISSAI 3000 – 3999 for existing and future performance audit guidelines Focus is on auditing of economy, efficiency and effectiveness at output level AG performance audit guideline completed and ready for final approval

16. Audit Directive - 2008 Investigations AGSA has adopted interim standards for investigations: –Based on previous AG forensic guidance and standards –With reference to relevant ISAs –With reference to code of professional conduct and ethics issued by the SA chapter of Association of Certified Fraud Examiners. Interim standards to be finalised after consultation with SAICA, SAIGA, IRBA and academic institutions Input in process based on ISA 240 considerations, complaints process, other references Typical response to investigation identified: –Own investigation –Reference to other investigation body, better geared to handle investigation Output from investigations –Report to the Executive/Accounting Authority –Report to relevant legislature –Report to any other legislature with a possible interest in the outcome of the investigation Exclusions –Non-financial matters

17. Audit Directive - 2008 GRAP statements Currently under development While under development / being implemented, handled as a comprehensive framework rather than a fully recognised accounting framework 2007 - IRBA session to guide recognition Implementation challenges –Full recognition –Guidance to entities affected –Readiness assessment at entities affected –Letter to Minister of Finance

18. Audit Directive - 2008 PAA requirements –Public entities Opt not to perform Flow of information Applicability of requirements –Complaints process Auditing standards –Regularity audit –Special audit –Performance audit –Investigations Response to base of accounting Repeal of previous requirements

19. Audit Directive - 2008 Reputation promise The Auditor-General has a constitutional mandate and, as the Supreme Audit Institution of South Africa, it exists to strengthen our country’s democracy by enabling oversight, accountability and governance in the public sector, thereby building public confidence