Inside INTOSAI

International Journal of Auditing – July 2004

Governing Board Endorses INTOSAI Strategic Plan

At an extraordinary meeting in Vienna on June 21-22, 2004, INTOSAI’s Governing Board unanimously endorsed the proposed INTOSAI strategic plan. The plan is the result of almost 3 years of intensive development and extensive consultation throughout the INTOSAI community (including meetings, personal contacts and electronic interactions, and circulation to all INTOSAI members in March 2004), and this process has yielded a broad-based consensus in support of the plan. The plan will be distributed to all INTOSAI members in early August 2004 and then presented for consideration and approval at the INTOSAI Congress in Budapest in October 2004.

Governing Board members
Governing Board members posed for a group photo during a break at the Vienna International Center.

The idea for an extraordinary meeting emerged at the Governing Board’s annual meeting in October 2003, when members agreed on the need to devote an entire meeting to discussing the proposed plan. Secretary General Franz Fiedler generously offered to host the meeting, and he and the staff of the General Secretariat did an excellent job of making the necessary arrangements. Mr. Yun-churl Jeon, Chairman of the INTOSAI Governing Board and the Korean Board of Audit and Inspection, ably chaired the day and a half meeting, guiding Board members through lively discussions and debates on the proposed plan.

In presenting the strategic plan for discussion and speaking on behalf of the 10-nation Strategic Planning Task Force (Antigua and Barbuda, Austria, Burkina Faso, Korea, Norway, Peru, Saudi Arabia, Tonga, the United Kingdom, and the United States) Task Force chairman David Walker, Comptroller General of the United States, noted that the proposed plan provides a blueprint to help INTOSAI and its members meet the challenges and opportunities of the 21st century. The plan also lays the foundation for INTOSAI to lead by example and helps ensure the economy and efficiency of its own operations. It provides a structure and rationale that will facilitate member SAIs’ engagement in INTOSAI in a way that maximizes contributions while minimizing the resources required.

The proposed plan consists of the following four strategic goals:

Goal 1: Accountability and Professional Standards: To promote strong, independent, and multidisciplinary SAIs by (1) encouraging SAIs to lead by example and (2) contributing to the development and adoption of appropriate and effective professional standards.

Goal 2: Institutional Capacity Building: To build the capabilities and professional capacities of SAIs through training, technical assistance, and other development activities.

Goal 3: Knowledge Sharing and Knowledge Services: To encourage SAI cooperation, collaboration, and continuous improvement through knowledge sharing, including providing benchmarks, conducting best practice studies, and performing research on issues of mutual interest and concern.

Goal 4: Model International Organization: To organize and govern INTOSAI in ways that promote economical, efficient, and effective working practices, timely decision-making, and effective governance practices, while maintaining due regard for regional autonomy, balance, and the different models and approaches of member SAIs.

Goal 4 is based in large part on a recommendation Portugal made at the October 2003 Governing Board meeting. It proposes a number of actions to help ensure the successful achievement of the plan’s three other goals. In developing this goal, the Task Force concentrated on three questions:

  • Does the current organization and structure of INTOSAI provide an appropriate focus on and alignment with the proposed strategic goals in the plan?
  • Does INTOSAI have sufficient capacity and resources to deliver the proposed goals and activities?
  • Is INTOSAI able to make decisions and respond to issues in an efficient and timely manner?

Consultation, Compromise, and Consensus

The work of the Governing Board Task Force was guided by a process grounded in consultation, compromise, and consensus. Several aspects of the proposed strategic plan received the greatest attention and changed most significantly during the planning process. Importantly, the final proposed plan does not propose increased membership dues at this time. The proposed Finance and Administration Committee would be tasked to review INTOSAI’s financial condition and existing resources and, beginning in 2007, make recommendations to the Governing Board every 3 years on whether, and to what extent, to increase members’ dues.

In addition, the proposed Director of Strategic Planning position was created in lieu of the previously proposed Director General position, and the reporting relationships between the Director of Strategic Planning, the Secretary General, and the Chairman of the Governing Board were clarified. The final proposed plan also clarifies the roles, responsibilities, and reporting relationships of some key entities responsible for implementing the plan, such as the goal liaisons and committee chairs. The final proposed plan also makes clear that the regional working groups will retain their operational autonomy. The plan is designed to encourage the regional working groups to share key successes and lessons learned across their regions and globally, as well as to provide additional support and assistance to regional groups, as appropriate.

To ensure that INTOSAI has the appropriate authority to implement the proposed plan, the Governing Board has also proposed selected revisions to INTOSAI’s governing statutes. The Task Force acknowledged the excellent work of Dr. Franz Fiedler and his staff in preparing the proposed changes to the statutes.

The process of consultation and compromise continued during the extraordinary Board meeting, where a number of further changes were made to the plan, culminating in the Board’s unanimous endorsement of the plan. As this issue of the Journal is going to press, the endorsed plan and related amendments to the statutes are being sent to all INTOSAI members.

Secretary General and First Vice-Chairman Honored at Meeting

As the extraordinary and historic Board meeting drew to a close, two members of the Board were singled out for special recognition. On the occasion of Dr. Franz Fiedler’s retirement as President of the Austrian Court of Audit and Secretary General of INTOSAI, Chairman Jeon presented him with a special plaque of appreciation on behalf of all Board members in recognition of 12 years of dedicated service to INTOSAI. Dr. Fiedler’s 12-year term ended on June 30, 2004, just one week after the extraordinary meeting.

Dr. Franz Fiedler received a special plaque of recognition from Board Chairman Jeon.

Dr. Franz Fiedler (left) received a special plaque of recognition from Board Chairman Jeon.

Dr. Fiedler presented Dr. Arpad Kovacs with a medal and certificate on behalf of the Austrian government.

Dr. Fiedler presented Dr. Arpad Kovacs (right) with a medal and certificate on behalf of the Austrian government.

Dr. Arpad Kovacs, First Vice-Chairman and President of the Hungarian State Audit Office, was also recognized at the meeting. He received a special medal and certificate from the government of Austria for his many contributions to state audit.

Auditing Standards Committee Update on the Development of Financial Audit Guidelines

Through the Journal, the INTOSAI Auditing Standards Committee (ASC) will regularly update the INTOSAI community on progress being made in the development of financial audit guidelines. The ASC is carrying out this work through a working group, chaired by Sweden and consisting of nine SAIs; a project secretariat set up at the Swedish National Audit Office; and contributions by members of a reference panel comprising 87 audit experts from 46 SAIs.

The Working Group on Financial Audit Guidelines held a very productive meeting in Yaoundé, Cameroon, March 30-31, 2004. Several important working documents were approved, including terms of reference for audit experts participating in the development of guidelines and reporting procedures for those experts.

The development of the guidelines is based on close cooperation with the International Federation of Accountants’ (IFAC) International Auditing and Assurance Standards Board (IAASB). Audit experts from the reference panel participate in IAASB task forces set up to develop new or revise existing International Standards on Auditing (ISA) to ensure that they include public sector considerations. Back-office experts are appointed to support the expert participating in task force meetings and to provide a broader INTOSAI perspective.

Currently, work is in progress on the following ISAs where INTOSAI experts are involved:

ISA 230 – Documentation

  • Expert: Ms. Kelly Ånerud, Norway
  • Back-office experts: Mr. John Fretwell, United State, Mr. Inge Danielsson, Sweden
  • Final version expected: March 2005

ISA 701 - Modifications to the Auditor’s Report

  • Expert: Ms. Bettina Jacobsen, Denmark
  • Back-office experts: Ms. Mary Radford, United Kingdom; Ms. Marcia Buchanan,
    United States
  • Final version expected: March 2005

ISA 260 - Communications with Those Charged with Governance

  • Expert: Ms. Tove Myklebust, Norway
  • Back-office experts: Mr. Filip Cassel, Sweden; Mr. John Fretwell, United States
  • Final version expected: September 2005

ISA 800 - Auditor’s Report on Special Purpose Audit Engagements

  • Expert: Mr. Jonas Hällström, Sweden
  • Back-office experts: Mr. Demsash Betemariam, Ethiopia; Mr. Martin Dees, the Netherlands; and Mr. Robert Cox, New Zealand

ISA 550 - Related Parties

  • Expert: Mr. John Thorpe, United Kingdom
  • Back-office experts: Ms. Zainun Taib, Malaysia (additional back-office experts are expected to be appointed shortly)

The working group is also charged with developing practice notes for each ISA to provide additional guidance that auditors in the public sector may need to apply the ISA. The notes will be based on the contributions of the audit experts from the reference panel. Work on the first practice note is currently in progress under the leadership of the Norwegian SAI.

A focus group has been set up to ensure that public sector issues are considered as early as possible in the process of deciding which ISAs need to be developed or revised. This focus group currently consists of three members: Ms. Vijaya Moorthy from the Office of the Comptroller and Auditor General of India, Ms. Mary Radford from the National Audit Office of the United Kingdom, and Mr. Filip Cassel from the Riksrevisionen of Sweden. The focus group will provide input to the IAASB staff during the drafting of a project proposal for IAASB’s consideration.

For further information, contact: the project secretariat or the chair of the working group, e-mail: projectsecretariat@riksrevisionen.se. For more detailed information regarding the standards, visit the IFAC Web site: www.ifac.org.

OLACEFS Pilot Program in Public Debt Auditing Completed

The Public Debt Committee (PDC) and IDI have accomplished the goals they set in June 2002 to develop and deliver a pilot program in public debt auditing in the OLACEFS region. According to IDI Director Magnus Borge’s report to PDC members assembled in Moscow, from June 7-9, 2004, 78 auditors from 18 OLACEFS countries received training in public debt auditing. Twenty-five of the participants were trained as public debt “champions,” which equipped them to design, develop, and deliver training programs and to develop teaching materials appropriate to the SAIs of the OLACEFS region.

The final activity of the pilot program was the second delivery of the 2-week Public Debt Workshop in the Dominican Republic in April and May 2004 for participants mainly from Central American SAIs. This second Spanish-language workshop used a case study built upon the experiences of some of the public debt champions who conducted a pilot public debt audit in Venezuela in February 2004.

The pilot training program covered topics such as public debt management and auditing, debt recording and information systems, the analysis of debt sustainability, risk measurement, benchmarking, debt reporting, and transparency. A brief “train-the-trainers” module was included, making it possible for all participants to deliver the public debt workshop to colleagues in their national SAIs, thereby multiplying the program’s benefits.

In addition, the pilot program facilitated the dissemination of public debt auditing materials to the SAIs and promoted knowledge sharing between participants and subject matter experts. The 78 participants have formed a public debt auditor’s network in OLACEFS to support their audit practices and sustain their efforts to enhance public debt audit practices in the region.

The course materials developed in OLACEFS will be translated into English. The ASOSAI region has indicated an interest in a similar program and will likely be the second INTOSAI region to offer public debt audit training in cooperation with IDI and the PDC.

For additional information, contact: Public Debt Committee, e-mail: jmanjarrez@asf.gob.mx; Web site: http://www.intosaipdc.org.mx, or the INTOSAI Development Initiative, e-mail: idi@idi.no; Web site: www.idi.no.