International Journal of Government Auditing – October 2005

The Establishment of The Intosai Professional Standards Committee

I am very honored and delighted to write this editorial. It is an excellent opportunity to highlight some of the tasks planned by the Professional Standards Committee (PSC) and to outline how the committee will function in the coming years.

The INTOSAI Strategic Plan adopted by INCOSAI XVIII called for the creation of a Professional Standards Committee to encompass and build on the work of the current Committee on Accounting and Reporting, Committee on Auditing Standards, and Internal Control Standards Committee, which now become subcommittees of the PSC.

At the extraordinary INTOSAI Governing Board meeting in Budapest on March 18, 2005, board members elected me PSC Chairman. The Governing Board decided that the PSC should draw up terms of reference to be presented for approval at the 54th Governing Board meeting in Vienna on November 11, 2005.

In cooperation with the PSC subcommittee chairs, the PSC members, the Goal 1 Liaison, the Chairman of the INTOSAI Governing Board, and the Secretary General of INTOSAI, the National Audit Office of Denmark drafted terms of reference for the PSC. The draft terms of reference were discussed at the first meeting of the PSC Steering Committee, which was held in Oslo, September 7-8, 2005. At this meeting, the Steering Committee also discussed timetables, milestones, and products/outputs for the PSC and its subcommittees until the 2007 INTOSAI Congress in Mexico. According to the proposed terms of reference, the PSC’s Chair, Steering Committee, and subcommittees will work in close cooperation.

The PSC Steering Committee consists of the PSC chair, the subcommittee chairs, a representative nominated by each INTOSAI region (AFROSAI, ARABOSAI, ASOSAI, CAROSAI, EUROSAI, OLACEFS, and SPASAI), the Goal 1 Liaison, the Chairman of the Capacity Building Committee, and two observers from the International Federation of Accountants. The Steering Committee is expected to meet annually or semiannually. Its next meeting will take place in Washington, D.C., May 4-5, 2006.

The PSC currently comprises the following subcommittees (the chair is indicated in parentheses):

  • Financial Audit Guidelines (Sweden)
  • Compliance Audit (Norway)
  • SAI Independence (Canada)
  • Internal Control Standards (Belgium)
  • Accounting and Reporting (USA)

The creation of a Performance Audit subcommittee is under consideration.

The PSC Chair will consult, as appropriate, with the Chairman of the INTOSAI Governing Board, the Secretary General of INTOSAI, the Director of Strategic Planning (who is to be appointed in November 2005), and the Goal 1 Liaison to help ensure that PSC plans and activities are generally aligned with the overall strategic plan.

PSC Tasks in the Coming Years

As it begins its work, the PSC recognizes the excellent and pioneering work of INTOSAI regional working groups, committees, working groups, and task forces, which has contributed to the development and implementation of professional standards and guidelines. The PSC will work in close cooperation with INTOSAI bodies and build on their successes. It is also important to stress the established informal links within the INTOSAI community. The continued development and implementation of professional standards can and will be carried out only with the ongoing and extensive involvement of member SAIs in the work.

In light of the mandate outlined in the INTOSAI strategic plan, one of the PSC’s main tasks will be coordinating and developing professional standards with due consideration to the needs and strategic issues facing SAIs in the 21st century.

SAIs must be able to adapt and respond to the changing demands of public audit and governance that result from changes and developments in the public sector. Given this dynamic and increasingly complex environment, it is crucial that SAIs work continuously to improve and develop professional standards, audit products, and audit processes.

In the planning and coordinating phase, the PSC Chair will focus on keeping the PSC aligned with the INTOSAI strategic plan, goal 1, and the requirements and needs of INTOSAI members. During this phase, it is important to (1) prioritize standards and guidelines for financial audit, compliance audit, performance audit, and accounting and (2) keep these standards and guidelines up to date with developments in the public sector. It Is also important to be aware of how needs and requirements may vary in different regions and auditing systems. Professional standards should address core work practices related to public audit and governance. The PSC Chair will be careful to address these considerations by coordinating with other INTOSAI bodies and external organizations.

The PSC will work to incorporate existing and new INTOSAI standards and guidelines into a common professional standards framework that will be more operational and coordinated. This will help disseminate knowledge about standards and guidelines and facilitate their practical use within the INTOSAI community and governments in general.

The PSC will facilitate knowledge sharing on professional standards both internally and externally by using modern communications technology in accordance with the soon-to-be adopted INTOSAI Communications Policy.

Every third year, the PSC intends to survey SAIs on issues that require INTOSAI standards and guidelines in order to be ready to launch new projects. These surveys will also be used to measure the achievement of PSC strategic goals and tasks identified in goal 1 of the strategic plan.

Accountability and Transparency

According to the INTOSAI strategic plan, one of the PSC’s tasks is to improve SAIs’ accountability and transparency by (1) developing a code for SAIs to adapt and apply, as appropriate, and (2) identifying and publicizing best practices in this area. A major challenge for all SAIs is to promote a better understanding of their roles, tasks, and responsibilities and improve communication and dialogue with governments. The PSC will prepare a document on transparency practices and general statements that each SAI can consider in relation to its mandate.

Concluding Remarks

The PSC’s first important task was preparing the draft terms of reference for approval at the upcoming 54th INTOSAI Governing Board meeting in Vienna. I was very satisfied with the results of the PSC Steering Committee’s Oslo meeting, which was part of this preparation.

Finally, I would like to assure all INTOSAI members that the PSC will do its very best to achieve the targets and carry out the intentions of the INTOSAI strategic plan. In doing so, the PSC will communicate and cooperate with other strategic goal areas and INTOSAI bodies so that together we can promote the development and adoption of appropriate and effective professional standards. For additional information about the PSC, contact: yvan.pedersen@rigsrevisionen.dk.