International Journal of Government Auditing – July 2013
by Vinod Rai, former Comptroller and Auditor General of India
I recently completed my term as Comptroller and Auditor General of India. Looking back over that term and the longer history of INTOSAI, it is obvious to me that INTOSAI has made momentous strides since its inception, especially during the past 5 years. Building on the foundation laid in Lima and its reiteration and consolidation in Mexico, INTOSAI has emerged as a champion of SAI independence. Today, it is recognized as the leading standard-setting body in the field of public audit. Examples of INTOSAI’s growing stature and confidence include
These developments also underscore the fact that INTOSAI is a catalyst in a paradigm shift in the way public audit is perceived today and its relevance to modern societies is demonstrated. In a few months, INTOSAI will be adopting a standard that asserts the values and benefits of SAIs.
SAIs are moving beyond the conventional roles that required auditors to express an opinion about whether financial statements were free from material misstatements. While this will continue to be a key role for all auditors, the increasing complexity in governance today and the demand for greater accountability place an onerous responsibility on auditors. Our minds are occupied as never before with questions about whether we have obligations beyond those achieved by traditional audits, whether governance is actually improving the lives of our citizens, and whether public policy and programs are responsive to the needs of those for whom such programs are intended. INTOSAI is now engaged in bridging the gap between the rhetoric of good governance and the actual practice thereof.
With increasing globalization and interdependence between national economies, tremors are felt in one corner of the world when financial or economic imbalances occur in another. The new economic paradigms instituted in the wake of successive economic crises have mandated reforms in the financial sector and government channels for delivering social sector schemes and economic policies. Models of governance are undergoing a change. Newer architectures are being structured to ensure efficient operations. Governments struggle under the strain of finding resources to meet citizens’ aspirations. This has prompted them to look beyond their own ability to do things. They are seeking to address the dichotomy of meager financial resources vying for competing interests and the huge investments required to augment public facilities and infrastructure by finding ways to secure private sector investment in activities which were earlier undertaken only by public finance.
All of this poses huge challenges to SAIs’ capability, effectiveness, and credibility and to the skill base needed to support their respective governments in meeting these situations. Failure to do so will severely erode the relevance of SAIs. Increasingly, questions are being asked about the role of SAIs in predicting or preventing economic and financial crisis— like the recent meltdown or the European debt crisis—by red-flagging areas requiring government intervention. Aren’t SAIs responsible for highlighting a country’s untenable fiscal position if the audit of public debt is a legitimate expectation of their stakeholders? Are these situations the results of accountability failures? These are uncomfortable questions for our institutions, and we have to take steps to ensure that we have the wherewithal to understand and deal with the underlying issues giving rise to these situations.
It is a matter of pride for INTOSAI that as a community we have responded to such challenges with both alacrity and foresight. Today, INTOSAI has developed mechanisms that are activated almost on reflex to deal with issues that engage our attention or demand our response. We have committees, subcommittees, working groups, and task forces preparing audit guidance in diverse areas that, when considered together, constitute virtually the entire gamut of our audit universe.
Perhaps the most encouraging development in recent times has been the formulation and adoption of ISSAIs, which we can now proudly call our standards. These standards take the best of what is available in private sector auditing and adapt it to public sector requirements. Framing and adopting standards is one thing, and I daresay the easy thing, but implementing the standards is quite another. It requires a commensurate ability on the part of the organization to be able to apply them. While the work of most of the developed SAIs is already circumscribed by a recognized set of standards, the ISSAIs now provide an opportunity for the less developed SAIs to have their work benchmarked against international best practices. Before they are able to do so, we have to help them build the required human resource base. The work of INTOSAI and regional working groups like ASOSAI is now focusing on disseminating the standards, creating awareness, and developing the knowledge and skills required to tailor our work around the standards. Given the magnitude of this exercise, it hardly needs mentioning that substantial funding is required to ensure the program’s success and that donor support is critical. In this context, the evolution of a partnership between INTOSAI and the international donor community, both multilateral and bilateral, assumes great significance. This partnership brings INTOSAI and the donor community together to provide a common approach. This approach increases strategic focus on and coordination in strengthening SAI capacity through mechanisms for facilitating donor funding and support in line with donor mandates, priorities, and requirements.
Now all of us, especially my colleagues who head SAIs, must come together to promote a culture of professionalism in SAIs and support them in the adoption of recognized best practices.
In my 41 years of public service, I have not come across any international fraternity of public servants that is as active, cohesive, professional, inclusive, and mindful of its larger responsibility to its citizenry as that of INTOSAI. We come together in a spirit of cooperation, not competition. We rejoice in the successes of our colleagues and agonize when attempts are made to muzzle the voice and independence of a sister institution. This is our ideology, culture, strength and raison d’être, and we must ensure that we never let it go.
In conclusion, I would like to express my thanks to all my colleagues in INTOSAI and ASOSAI. It has been a pleasure to serve with you in the international auditing community, and I wish you all the best in your future endeavors.