Financial Audit Guidelines Subcommittee


Subcommittee Meetings for 2008

In April, the Financial Audit Guidelines Subcommittee (FAS) held a meeting in London hosted by the U.K. National Audit Office. The subcommittee discussed the prerequisites for its work after 2010 and established its due process basis. The FAS and invited representatives of the secretariat of the Subcommittee on Compliance Audit discussed continued cooperation between the two subcommittees.

At the subcommittee’s next meeting on October 16-17, 2008, hosted by the Board of Audit and Inspection of the Republic of Korea, the main agenda item will be the approval of 10 practice notes for exposure.

New Subcommittee Member

In August 2008, the Office of the Auditor General of South Africa became a new member of FAS. The subcommittee looks forward to the South African SAI’s contributions to its work during this intense phase.

Expert Meetings

Special expert teams (SET) are groups of three or four experts assigned to draft practice notes to a certain series of International Standards on Auditing (ISA). At the beginning of June, SET 2 met in Stockholm to draft practice notes to ISAs 500, 560, 570, and 580. The team was made up of experts from the SAIs of Scotland and Estonia and the European Court of Auditors.

In August, SET 3—comprising experts from the SAIs of Norway, South Africa, and Sweden—drafted practice notes to ISAs 200, 210, 240, and 250.

After FAS approval, the drafts developed will be exposed for comment from November 2008 through January 2009.

In September, SET 4 (with experts from the SAIs of Pakistan, the United States, and Canada) met to draft practice notes to ISAs 600 and 610. The meeting took place in New York and was hosted by the International Auditing and Assurance Standards Board (IAASB).

Experts to draft practice notes as part of the remaining SETs will be appointed during the fall of 2008.

Evaluation of FAS Work Processes

In April 2008, a group of experienced experts met in London with members of the FAS Secretariat to evaluate the subcommittee’s work processes. Participants in the meeting proposed that to speed up the development of practice notes, only special expert teams be used from this time forward. The FAS approved this proposal and issued a new plan for the practice note work (see the following section).

As a condition for continued financial support from the World Bank (one of the subcommittee’s main financial supporters), an external consultant will carry out a comprehensive evaluation of the FAS’s work.

Schedule for Exposure of Practice Notes

The schedule below lists the SETs responsible for preparing practice notes and the planned exposure periods for the notes. The exposure periods may be delayed if there are any departures from approval procedures at upcoming FAS meetings.

SET 2 (Exposure Period: November 2008–January 2009)

  • ISA 500 – Considering the Relevance and Reliability of Audit Evidence

  • ISA 560 – Subsequent Events

  • ISA 570 – Going Concern

  • ISA 580 – Written Representations

SET 3 (Exposure Period: November 2008–January 2009)

  • ISA 200 – Overall Objective of the Independent Auditor, and the Conduct of an Audit in Accordance with ISAs

  • ISA 210 – Agreeing the Terms of Audit Engagements

  • ISA 240 – The Auditor’s Responsibilities to Consider Fraud in an Audit of Financial Statements

  • ISA 250 – The Auditor’s Responsibilities Relating to Laws and Regulations in an Audit of Financial Statements

SET 4 (Exposure Period: December 2008–February 2009)

  • ISA 600 – The Audit of Group Financial Statements (Including the Work of Other Auditors)

  • ISA 610 – The Auditor’s Consideration of the Internal Audit Function

SET 5 (Exposure Period: February 2009–April 2009)

  • ISA 700 – The Independent Auditor’s Report on General Purpose Financial Statements

  • ISA 705 – Modifications to the Opinion in the Independent Auditor’s Report

  • ISA 706 – Emphasis of Matter Paragraphs and Other Matter(s) Paragraphs in the Independent Auditor’s Report

  • ISA 710 – Comparative Information – Corresponding Figures and Comparative Financial Statements

  • ISA 720 – Other Information in Documents Containing Audited Financial Statements

SET 6 (Exposure Period: April 2009–June 2009)

  • ISA 530 – Audit Sampling

  • ISA 501 – Audit Evidence Regarding Specific Financial Statement Account Balances and Disclosures.

SET 7 (Exposure Period: May 2009–July 2009)

  • ISA 510 – Initial Audit Engagements–Opening Balances

  • ISA 520 – Analytical procedures

  • ISA 540 – Auditing Accounting Estimates, including Fair Value Accounting Estimates, and Related Disclosures


Final versions of the practice notes are expected to be ready 3 to 4 months after the end of their exposure periods. The European Commission of Auditors will translate the notes into four of the five official INTOSAI languages (all except Arabic). The Arabic translation will be done by the German translation service Büro Tazir, and the quality assurance will be done by the Moroccan Cour des Comptes. The translation process is expected to take most of 2009, and the translated practice notes will be presented to the INTOSAI Governing Board at INCOSAI 2010.

For additional information, please contact the FAS Secretariat:
Web site:

Subcommittee on Performance Audit

The Brazilian Court of Audit hosted the second meeting of INTOSAI’s Subcommittee on Performance Audit (PAS) in Brasilia, Brazil, May 28–30, 2008. Minister Walton Alencar Rodrigues, the PAS Chair and President of the Court of Audit, welcomed the participants, which included subcommittee members from the SAIs of Saudi Arabia, Australia, France, the Netherlands, Mexico, Norway, and Sweden and representatives from the European Court of Auditors, the SAI of Denmark (chair of INTOSAI’s Professional Standards Committee), the World Bank, and the INTOSAI Development Initiative (IDI).

Participants in the Subcommitte on Performance Audit meeting in Brazil in May 2008
Participants in the Subcommitte on Performance Audit meeting in Brazil in May 2008.

The meeting agenda included presentations by the SAIs of Denmark, Brazil, France, and Australia and by IDI. The Brazilian SAI discussed the results of a mini-survey carried out to determine the audit phases and audit methods or techniques that should be addressed in new performance audit guidelines. The Danish delegates talked about the process for developing standards and guidelines and key Professional Standards Committee initiatives. The French delegate outlined the work of the INTOSAI Program Evaluation Working Group and how this work will relate to the PAS in the future. The Australian SAI described performance audit issues that are important in Australia and relevant to PAS. The IDI delegate addressed the current performance audit scenarios in different INTOSAI regions and related IDI strategies and actions.

Participants discussed the next steps in PAS work and approved the work plan for 2008–2010. The subcommittee members agreed that PAS would prepare standards for performance audit by extracting them from current INTOSAI guidelines and would develop guidance on establishing a sustainable performance auditing function within an SAI. The work plan is available on the PAS Web site:

The next PAS meeting will be in Norway in April 2009.

The current members of the PAS are the SAIs of Brazil (Chair), Australia, Canada, Denmark, France, Guyana, Kiribati, Mexico, the Netherlands, Norway, Saudi Arabia, Slovenia, South Africa, Sweden, Tunisia, and the United Kingdom and the European Court of Auditors.

For additional information, contact the Brazilian Court of Audit:
Web site:

Subcommittee on Internal Control Standards

On April 21 and 22, 2008, a task force of the INTOSAI Subcommittee on Internal Control Standards met in Brussels, Belgium, to discuss how to implement the subcommittee’s work plan, which was approved at the XIX INCOSAI. The Belgian Court of Audit, which chairs the subcommittee, hosted the meeting. Other attendees included delegates from the SAIs of Bangladesh, Hungary, Lithuania, the Netherlands, Romania, the Russian Federation, South Africa, Spain, the Sultanate of Oman, Ukraine, the United Kingdom, and the United States. A delegate from the Institute of Internal Auditors (IIA), which concluded a memorandum of understanding with INTOSAI in 2007, also attended the meeting.

The task force endorsed the 2008 action plan for collaboration with the IIA. According to the terms of this plan, the IIA and the subcommittee were to work out joint papers on the independence of internal auditors in the public sector and collaboration between external and internal auditors in the public sector. After being reviewed by both the subcommittee and the IIA, the papers are to be included in INTOSAI’s framework of professional standards as part of the INTOSAI Guidance for Good Governance (INTOSAI GOV) to be approved by the XX INCOSAI in 2010.

According to the action plan, the IIA and the subcommittee also agreed to work together to prepare an e-platform of internal control tools and develop aspects of good governance. Both entities are committed to informing each other about the latest developments in the field of internal control.

The task force reviewed the framework drawn up by the Belgian Court of Audit on collaboration between SAIs and internal auditors and the IIA’s outline regarding the internal auditor’s independence in the public sector. Based on comments received from task force members at and following the meeting, the chair and the IIA are revising the documents, which will be submitted to all subcommittee members for comment.

A working group was created to make the e-platform for internal control standards and guidance on good governance operational as soon as possible. Working group members include the SAIs of South Africa, the United States, and the Netherlands, with the latter being the lead SAI.

Finally, the task force suggested that lines of communication be opened with COSO as soon as possible to implement the work plan. (COSO stands for the Committee of Sponsoring Organizations of the Treadway Commission, a nonprofit commission that in 1992 established a common definition of internal control and created a framework for evaluating the effectiveness of internal controls.) The chair of the Professional Standards Committee will take the lead in establishing formal contacts with COSO.

For additional information, contact the Belgian Court of Audit:
Web site:

Additional Events at the VII EUROSAI Congress

The July 2008 edition of this Journal reported on the VII EUROSAI Congress, held in Krakow, Poland, in June 2008 (see p. 18). A number of other events in addition to those reported in that article took place at the congress.

Three international joint audit reports were signed. The first reported on a parallel audit conducted by the SAIs of Poland, Ukraine, and Belarus and was entitled Protecting the Waters of the Bug River Watershed from Pollution. The second, entitled Waste Movement across the State Borders of Ukraine, Slovakia, and Poland from 2004-2007 (first half) in view of the Basel Convention, reported on a parallel audit conducted by the SAIs of Poland, Slovakia, and Ukraine. The final joint report was on the international coordinated audit of the Chernobyl Shelter Fund that was conducted by the SAIs of Ukraine, Germany, Poland, the Netherlands, the Russian Federation, Slovakia, Switzerland, and the United States and by the European Court of Auditors.

In addition, two bilateral agreements on cooperation were signed. The agreements were between the Accounting Chamber of Ukraine and the Spanish Court of Audit and between the Supreme Chamber of Control of Poland and the Court of Accounts of Moldova.

For additional information, contact the Supreme Chamber of Control (NIK) of Poland:
Web site:

OLACEFS Working Group on Environmental Audit

The sixth meeting of the OLACEFS Working Group on Environmental Audit (COMTEMA) took place at the headquarters of the Brazilian Court of Audit in Brasilia, Brazil, June 11–13, 2008.

Representatives of the SAIs of Argentina, Mexico, Paraguay, Colombia, and Venezuela participated in the event, and the SAIs of Estonia, Peru, El Salvador, and Panama sent observers. The meeting agenda included a lecture from a specialist on climate change, presentations by Brazilian Court of Audit representatives, and evaluations of the actions proposed in the working group’s work plan for 2006 through 2008.

The members of the working group adopted the 3-year work plan, agreed to limit the number of members, and updated descriptions of positions and member responsibilities. They also held a preliminary discussion of the 2009-2011 work plan, which places a priority on cooperation audits related to work plan objectives.

The Brazilian Court of Audit will continue to coordinate the working group until its next meeting in Argentina in April 2009.

Participants in the OLACEFS Working Group on Enironmental Audit meeting in Brazil in June 2008

For additional information, contact the Brazilian Court of Audit:
Web site:

New Name for Pacific Regional Working Group

The name of the South Pacific Association of Supreme Audit Institutions (SPASAI) was changed to the Pacific Association of Supreme Audit Institutions (PASAI) at the 11th PASAI Congress held in April 2008. The name change was made to acknowledge that members of the working group are from both the North and South Pacific.

The New Zealand Controller and Auditor-General remains as the Secretary-General of PASAI. A new Secretary-General is to be named, probably at the 12th PASAI congress in Palau in mid-2009, and a PASAI Secretariat will be established in Suva, Fiji. The SPASAI Web site has been removed and a new Web site will be established at

For additional information, please contact the New Zealand Office of the Controller and Auditor-General:
Web site: