Download presentation
Presentation is loading. Please wait.
Published byCora Owens Modified over 9 years ago
1
1 History of RIFIX Working Group Interaction between Internal and External Audit and Financial Inspection
2
2 “Internal Audit – External Audit – Financial Inspection” Permanent concerns Main differences? How to distribute roles and tasks? Ways for interaction? Where must this cooperation be defined? A law, bylaws…? Once PIFC system is installed – what to do with inspection? Etc. RIFIX Preconditions to creation of RIFIX
3
3 - Interaction between Internal and External Audit and Financial Inspection; a working group is suggested 7 th Plenary meeting, Yalta, Ukraine, May 2010 13 th Plenary meeting, Ohrid, Macedonia, October 2011 - Interaction between Internal Audit and Financial Inspection 17 th Plenary meeting, Budapest, Hungary, June 2012 - Difference in functions between External Audit, Financial Inspection and Internal Audit? RESOLUTION on setting up a Working Group! 23 rd Plenary meeting, Tbilisi, Georgia, April 2013 - Informing participants of the Plenary on creation of a Working Group; a short discussion on activities of this Working Group
4
4 Agenda item: study links between Internal and External Audit and set up a Working Group to further study this issue; revision and internal audit: friends or foes? 7 th Plenary meeting in Yalta, Ukraine, 25-28 May 2010
5
5 Yalta Resolution: Reform of inspection must start simultaneously with implementation of internal audit
6
6 Agenda item: a short presentation and open discussion on the “Role of financial inspection (its legal and organizational framework, functions, roles) and relation with internal audit". 13 th Plenary meeting in Ohrid, Macedonia, 25-29 October 2011
7
7 Conclusions of Ohrid meeting : The function of Financial Inspection must effectively complement introduction of Internal Audit. Investigative activities of Financial Inspection will enable Internal Audit to focus on study of organization’s operational processes and systems in order to suggest improvements in its management. Internal Audit and Financial Inspection must cooperate together by offering meaningful information within their competence. Competences of Financial Inspection and Internal Audit must be clearly delimited.
8
8 Agenda item: principles and differences in functions of Supreme Audit Institution, Financial Inspection and Internal Audit Unit? 17 th Plenary meeting in Budapest, Hungary, 15-16 June 2012
9
9 Conclusions of Budapest meeting: A centralized Financial Inspection functioning in a government system is a necessary instrument to identify important violations and fraud. In this regard, it is necessary to distribute competences and responsibilities between Internal Audit, Financial Inspection and External Audit in order to ensure efficient development of public financial control. Set up a working group to elaborate on relations and distribute competences and responsibilities between Internal Audit, Financial Inspection and External Audit.
10
10 Informing IACoP members about a newly created Working Group on relations between Internal Audit, Financial Inspection and External Audit (or RIFIX). 23 rd Plenary meeting in Tbilisi, Georgia, 22-24 April 2013
11
11 -Meeting members of the Working Group; membership was determined based on earlier selection process. -Definition of goals and objectives of the Working Group START OF ACTIVITIES!!! 25 th meeting of CoP 1 st meeting of RIFIX Working Group, St.-Petersburg, Russia, September 2013
12
Goals and objectives of the Working Group: (1) to offer a “Correct model” of how to distribute role and place of IA, FI and EA in public administration; to define ways of cooperation between IA, FI and EA: - coordinate planning – minimize duplications; - mutual use of audit results; - lines of responsibility; - CHU within the system of interaction between IA, FI and EA
13
to offer an adequate Modernization Strategy of Inspection in the context of PIFC system implementation : - function of inspection within PIFC system (area of responsibility, competences and tasks); - focus on identification of financial fraud and abuse; - interact with EU Anti-Fraud Committee (OLAF) Goals and objectives of the Working Group: (2)
14
ELABORATED DOCUMENTS: Concept of sharing roles and tasks between IA, FI and EA; Memorandum (model) of interaction between IA, FI and EA; Inspection reform strategy in the context of PIFC implementation; REQUIRED EXPERIENCE AND KNOWLEDGE!!! Expected results
15
15 Meeting in St.-Petersburg, Russia, September 2013 - Survey results on current interaction between IA, EA and FI in all countries members of the Working Group summarized; -International theoretical principles of interaction studied. Achievements: Meeting in Moscow, Russia, May 2014 - Definition of common fundamental terms and concepts used by the group; - Elaboration of RIFIX Conceptual Note; Meeting in Astana, Kazakhstan, September 2014 -Update and finalization of the RIFIX Conceptual Note; -Discussion of the whole transition process from inspection to internal audit
16
Terminology Developing a common understanding of what we mean when we say something
17
Why clarity? We are challenged by the problems of language, notions and options Language problems: –Audit or control? –Accountability or responsibility? Notions –Financial control – a process or a person? –What do such key terms as assurance and risk assessment mean? –Meaning and application of PIFC and FMC Options –Different forms of Supreme Audit Institutions (SAI)? –Different characteristics of ex ante and ex post financial control?
18
Some conclusions of the Survey St.-Petersburg 2013 Moscow 2014 18
19
SAI and IA SAI and FIIA and FI Armenia Insufficient, improvement requiredRather bad Insufficient, improvement required Bosnia & HerzegovinaSufficient and clear Insufficient, improvement required Bulgaria Insufficient, improvement required Недостаточно, требует улучшения CroatiaSufficient and clear Недостаточно, требует улучшения Hungary Insufficient, improvement required KazakhstanSufficient and clear Republic of Kyrgyzstan Insufficient, needs improvement_ Macedonia (FYR)Sufficient and clear Moldova Insufficient, improvement required Montenegro Insufficient, improvement required Sufficient and clear RomaniaSufficient and clear Russian FederationSufficient and clear Insufficient, improvement requiredSufficient and clear 6/124/115/11 Extent of cooperation between regulatory institutions В20. How do you assess cooperation in your country between … ВВ. 21-23. How is cooperation organized between the following institutions … Most common types of cooperation : 1.SAI and IA: exchange of reports and information (75%), coordination of plans, membership in commissions/councils and systemic use of reports/results (50%). 2.IA and FI: (no FI in Kyrgyzstan) exchange of reports and information (9/11), coordination of plans and systemic use of reports/results (5/11), membership in commissions/councils (4/11). 3.IA and FI: (no FI in Kyrgyzstan) exchange of reports and information (5/11), coordination of plans, membership in commissions/councils and systemic use of reports/results (4/11). Sufficient and clear Insufficiently clear, improvement required Rather bad 19
20
Exchange of control results Planning Joint control activities Systematic use of each other’s results ARMxxxx B&Hxxx BLGxxx CROxx HUNxxx KAZxxx KYR MACxxxx MLD x MONxxx ROMxxx RUSxxxx 10959 Note: “other” areas referred to training. Respondents were least of all interested in “joint control activities”. Problems of interaction between IA, EA and FI : 1.Competition for prestige (7/12); 2.Inadequate procedures (5/12); and 3.Mentality (4/12). Further cooperation will add value В. 29. Please indicate the areas where you think cooperation may be useful? 20
21
21 Next steps: -Elaborate a memorandum (agreement) on interaction between Internal Audit, External Audit and Financial Inspection -Elaborate a transition strategy from Financial Inspection to Internal Audit??? -best practice of change management – how to manage the change towards IA
22
22 THANK YOU FOR ATTENTION! Sergei Chornutskiy chornutskiy@dkrs.gov.ua
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.