1. The ISSAI implementation in 2011 – ISSAIs for financial audit. The Swedish National Audit Office. Meeting of Experts of SAIs of the Baltic and Nordic countries and Poland 4-5 september, Audit Director Carin Rytoft Drangel 2015-11-131

2. Financial year 2011  Full implementation of ISSAI 1000- 1810 Financial Audit Standards.  We will use the Performance Audit Standards.  We will not use the Compliance Audit Standards. 2015-11-132

3. Three step implementation (financial audit guidelines)  1998: Our first methodology based on the ISAs effective as of 1998.  2005-2007: Implementation of all the requirements in the (then existing) ISAs.  2011: Implementation (in full) of the revised and redrafted ISAs. 2015-11-133

4. The Swedish mandate  According to the legislation “Act on the Audit of Public Operations”  Audit of all government agencies (about 250), with the intention of determining if their financial statements are true and fair. We issue an auditor’s report for each agency.  According to generally accepted audit principles. Defined in the same way as in the private sector. (International Standards on Auditing =ISA)  The financial statements comprise other information required by the parliament through instructions and appropriation directions. (included in the financial reporting framework) 2015-11-134

5. Preparations  Discussions with the Parliament and the Auditor Generals about the implementation, despite our clear legislation. Implementation in full or inspired by….  Clarify the responsibility of the management (for the Government Offices and Ministries).  The staff needs to understand the big picture.  Training.  Translation (done by the institute of chartered accountants in Sweden ).  Decision about references to the ISSAIs in the Audit reports in 2012. 2015-11-135

6. Experiences so far  Increased communication with management and those charged with governance.  Written representations from management introduced.  Presentation of all findings to management before issuing auditor’s report.  Identification of some weaknesses in the financial reporting framework.  Inconsistencies in the legislation for the consolidated accounts for Sweden.  Underestimated need for education and training. Recommendation: Tests and training courses.  The infrastructure ( audit tool and documents) was not prepared for the ISSAI implementation. 2015-11-136

7. Experiences so far  It requires dedicated method developers to change the existing methodology manuals, working paper, templates, courses etc.  There will be a great need for professional meetings to discuss and establish the methodology. 2015-11-137

8. Have we succeeded?  We delivered all audit reports in time.  We did receive the written representations from the management of the 250 agencies.  We expected a more heavy workload but we underestimated the hours needed.  We are currently performing an inspection of seven completed engagements for 2011 in order to evaluate our system of quality control and in order to evaluate our ISSAI implementation.  We will have a peer review in 2013. 2015-11-138

9. Is there anything positive to say about the implementation?  The management of the agencies are positive to the increased communication and also to the written representations (with few exceptions).  We have had a lot of discussions about how to implement the audit methodology in practice. The staff has now a better knowledge of the methodology, and a more harmonized view.  We have found some weaknesses in the financial reporting framework. This has together with inconsistencies in the legislation for the consolidated accounts for Sweden led to a discussion with the Government. 2015-11-139