International Journal of Government Auditing – Summer 2016
The Office of the Auditor General of Thailand (OAG) hosted the 50th Asian Organization of Supreme Audit Institutions (ASOSAI) Governing Board Meeting (GBM), as well as the International Symposium on the “National Integrity System (NIS)” February 15-19, 2016, on the auspicious occasion of the 100th anniversary of its establishment.
The objectives of the symposium were:
The symposium participants included honorable delegates from over 20 countries. It was OAG’s great honor to have as keynote speaker, Mr. Liu Jiayi, Auditor General of the National Audit Office of the People’s Republic of China and Chairman of INTOSAI. OAG was also honored to host as a symposium presenter, Dr. Josef Moser, the President of Austrian Court of Audit and INTOSAI Secretary General.
Additional honorable speakers who contributed to the success of this special event included Tan Sri Haji Ambrin Bin Buang, Auditor General of National Audit Department of Malaysia; Mr. Shashi Kant Sharma, Comptroller and Auditor General of India; Prof. Dr. Recai Akyel, President of Turkish Court of Accounts; Ms. Ina de Haan, Senior Auditor of the Netherlands Court of Audit and IntoSAINT expert; Mr. Laszlo Domokos, President of the State Audit Office of Hungary; Mr. Peter J. Ainsworth, Senior Anti- Corruption Council, U.S. Department of Justice; and Mr. Tony Kwok Man Wai, Former Deputy Commissioner and Head of Operations, Independent Commission Against Corruption (ICAC), Hong Kong.
H.E. Dr. Harib Al Amimi, President of State Audit Institution (SAI) and First Vice-Chairman of the INTOSAI Governing Board, opened the 67th INTOSAI Governing Board meeting held at Emirates Palace in Abu Dhabi, United Arab Emirates, November 9-11, 2015.
Dr. Al Amimi delivered an opening speech welcoming the heads of Supreme Audit Institutions, governing board members, U.S. representatives and international organization representatives who participated in the meeting. He emphasized the importance of the INTOSAI role in developing the control standards over the public sector; establishing the principles of transparency, accountability and integrity; promoting the independence of Audit Institutions to preserve the public funds; and the good use for the purposes intended.
Dr. Al Amimi also stressed the need for concerted efforts to face the challenges ahead, in particular the United Nations approved development goals beyond 2015, the expected role of SAIs on evaluating the level of achieving these goals, determining weaknesses in the financial systems and the level of the institutional control instrument in federal sector departments.
The Governing Board agenda included a number of critical topics, such as the draft of activating the role of the INTOSAI Governing Board; the Strategic Plan 2017-2022; INTOSAI sub-committee and regional working group reports; and the UAE SAI report on the preparations of the next INCOSAI to be held in Abu Dhabi in December.
In a press statement on the margins of the meeting agenda, Dr. Al Amimi Vsaid that INTOSAI is concerned with the preservation of public funds and the continuity of the economic growth in member countries, noting that the role of these audit institutions will be different since adopting the development goals beyond 2015 by the United Nations. In addition, he said that during the next INCOSAI to be held in the United Arab Emirates in December 2016, the role of Supreme Audit Institutions will be elaborated to submit reports to the extent where development goals are achieved by each country’s Audit Institutions. This is generally in the interest of all people in the world, as the preservation of public funds results in the sustainability of economic growth and maintenance of high level of federal services to people. He added that during the past 10 years, SAI has adopted a number of changes in the work methodology, which was built on best practices of Audit Institutions around the world. This new methodology was implemented effectively during the past five years.
Moreover, Dr. Al Amimi stressed that there has been significant cooperation between SAI and political decisionmaking positions in UAE, represented by His Highness Sheikh Khalifa bin Zayed Al Nahyan, the Cabinet, and the Federal National Council. The cooperation focuses on the establishment of transparency, integrity and accountability principles. Moreover, the SAI was assigned to work on the United Nations Convention against Corruption signed by the UAE in 2006.
The Professional Standards Committee (PSC) met in Copenhagen in May 2016. The event marked a significant milestone for the PSC Chair (Denmark) as this year is its last as chair of that committee.
Representatives from the Tribunal de Contas (TCU) in Brazil (the incoming chair) and the European Court of Audits (incoming vice chair) discussed efforts for a smooth transition after the XXII INCOSAI.
The PSC also considered a proposal to merge two of its subcommittees— the Accounting and Reporting subcommittee and the Financial Auditing Standards subcommittee.
After consideration of a number of comments, the PSC approved the exposure draft of the ISSAI 30— the INTOSAI Code of Ethics. For a succinct overview of the new ISSAI 30, please refer to a recent Journal article: http://www.intosaijournal.org/pdf/ijga_winter16_eng_www_color.pdf
The PSC was also briefed by representatives of the Forum for INTOSAI Professional Pronouncements charged with developing a new ISSAI Framework. The Forum has exposed a draft framework that could significantly change the organization of standards and INTOSAI Guidance for Good Governance.
The Professional Standards Committee (PSC) has initiated a process to improve the Framework for INTOSAI’s Professional Pronouncements. The ambition is to have the framework in effect by 2019.
The INTOSAI Governing Board decided in 2014 to assemble a common forum of experts to address standard-setting issues across the full Framework of Professional Standards. This forum, now known as the Forum for INTOSAI Professional Pronouncements (FIPP), has drafted a proposal for a revised framework of professional pronouncements that will be presented to the Governing Board for endorsement at the coming INCOSAI meeting in Abu Dhabi, December 2016.
The purpose of the improved framework is to enhance the credibility of INTOSAI’s professional pronouncements, further the use of the ISSAIs as the authoritative standards for public-sector auditing and to provide relevant and practical guidelines for public sector auditors around the world.
The proposal reflects this purpose by seeking to:
The proposal has been drafted by the 15 experts in FIPP. These experts were nominated by INTOSAI’s members and selected by the chairs responsible for INTOSAI’s strategic goals on standard-setting, capacitybuilding and knowledge-sharing. FIPP made its first report to the PSC at the Steering Committee meeting in Copenhagen May 26-27, 2016, in the presence of the Goal Chairs for Capacity Building and Knowledge Sharing. The Goal Chairs and the PSC Steering Committee broadly welcomed the proposal made by FIPP.
Although the current framework that was endorsed in 2007 has been a major success, it has now reached a point where it should be revisited. The current framework defined the two categories of professional pronouncements issued by INTOSAI—the International Standards of Supreme Audit Institutions (ISSAIs) and the INTOSAI Guidance for Good Governance (INTOSAI GOVs).
Since 2007, the INTOSAI Framework of Professional Standards (IFPS) has developed considerably. Taking into account the documents that are likely to be endorsed by INCOSAI 2016, we estimate that the framework will consist of some 93 pronouncements extending over some 3,100 pages. The framework has become too massive and is in need of clarifying the differences between the basic principles, standards and guidelines. The advantage of the revised framework is that it clearly identifies those pronouncements that require compliance from a SAI that wishes to claim ISSAI compliance in its audit reports and that it makes a clear distinction between the ISSAIstandards and non-mandatory guidance.
The INTOSAI community needs clear, practical and professional standards that can be put to use by its members. The revised framework will aim at doing this by strengthening the drive to enhance the effective and independent auditing process also underlined by the United Nations General Assembly in Resolution A/66/209, which stresses the need for “promoting the efficiency, accountability, effectiveness and transparency of public administration by strengthening Supreme Audit Institutions.”
The draft proposal is illustrated in Figure 1: The Revised Framework of Professional Pronouncements. There are three large groups of documents within this framework. At the top level are the INTOSAI principles (green in color on Figure 1), including the Lima Declaration and the Mexico Declaration on SAI Independence. Auditing standards (the ISSAIs ) follow (red in color on Figure 1).
These are the requirements that would have to be fulfilled by a SAI that wishes to claim ISSAI compliance in its audit reports. Finally, there are the guidance documents (blue in color on Figure 1). These documents are nonmandatory and offer the SAI and the auditor assistance in implementing the ISSAIs, insights when planning, executing or reporting on specific subjects or tools for assessing ISSAI compliance, etc. In addition to these three overall groups of documents, the framework also includes space for future development of competency-standards and competency-guidelines (these appear to the right of the auditing-standards and auditing-guidelines in Figure 1).
In its current form, the proposal for the revised framework will seek to improve the credibility of INTOSAI’s professional pronouncements, assist in making them an authoritative framework for public sector auditing and enhance quality. The proposal is, however, likely to be modified, as it awaits comments by the INTOSAI members. Therefore, the following description of the framework is subject to change.
The revised framework will be titled “INTOSAI Framework of Professional Pronouncements (IFPP)” to reflect the fact that it includes documents other than ISSAIs (standards). In order to be characterized as ISSAI standards, a document needs to be in line with the requirements set out in ISSAI 100. By clarifying the overarching role of ISSAI 100, the fundamental principles of public sector auditing (component 4), it is possible to place the subject-specific guidance (that currently appears in the 5000 series ISSAI) in the appropriate place as supplementary non-mandatory subject-specific guidance that SAIs and auditors might find useful when carrying out financial, performance or compliance audits in the areas concerned.
Other documents may be included in the IFPP under other categories or linked to it on the ISSAI web site (www.issai. org). We propose that two other categories are relevant in the IFPP—the INTOSAI Principles (INTOSAI-P) and the Auditing Guidance. The revised framework reflects the need to reduce the number of ISSAIs that have to be implemented to achieve ISSAI compliance, thereby facilitating easier ISSAI implementation.
Finally, this clarification of the overarching role of the fundamental principles opens up the possibility of systematically reviewing existing pronouncements to ensure that they are coherent with these fundamental principles and free of inconsistencies. The process of revising the framework can be followed at www.issai.org.
The Chair of INTOSAI’s Finance and Administration (FAC) Task Force on the 2017-2022 Strategic Plan, Mr. Gene Dodaro, released a draft of the plan for consideration among the Full Membership of INTOSAI earlier this year. The draft, based on the thoughtful input of many across the INTOSAI community, is a perfect example of our motto “Mutual Experience Benefits All”.
Key committees of INTOSAI—namely the PSC, CBC, KSC, and the FAC—prepared essential sections of the plan and provided substantive input throughout. And, every one of the INTOSAI regional organizations, the Governing Board, the General Secretariat, IDI and the Director of Strategic Planning, provided contributions that were equally critical to our success in developing the plan.
The 2017-2022 Strategic Plan update is still underway, and there are some new key initiatives that will guide the global auditing community in the coming years. The plan is part of a much larger effort on improving how we do business, how we continue to deliver value to the public, how we remain steadfast in the promotion of good governance.
If adopted, the plan will focus efforts on four goals:
And, through Strategic Objective Reviews, there is a dedicated team of goal chairs helping to bring this new Strategic Plan to life with the intent to:
These reviews will be an iterative process that will, ultimately, contribute to continuous learning and improvement. With the diverse, global makeup of the task force and the structure of the strategic objective reviews being based on shared experiences and lessons learned, the 2017-2022 Strategic Plan is INTOSAI’s way forward for the audit community of the future.
As part of the Ministerial Segment of the Economic and Social Council (ECOSOC) High-Level Political Forum 2016, a high-level roundtable discussion took place in the United Nations (UN) in New York on “The contribution of Supreme Audit Institutions to ensuring that no one is left behind in the implementation of the Sustainable Development Goals (SDGs)” with the active participation of most of the INTOSAI leadership. The dedication and readiness to support raising the awareness of SAI contributions to monitoring the implementation of the 2030 Agenda for Sustainable Development is greatly appreciated.
It was a great success with the participation of numerous Ambassadors and representatives of Embassies to the UN and high-level UN officials. The discussion highlighted the opportunities and potential contributions of SAIs to reviewing the implementation of the SDGs at different levels.
The importance of performance audits and the new audit finding framework for SDGs; the necessary capacities, independence and mandates of SAIs to be able to support the SDG implementation and, thus, contribute to improve the lives of citizens; the role of SAIs in assessing and supporting the implementation of SDG 16, and, in particular, target 16.6, which provides for transparent, efficient and accountable institutions; SAIs assessing the readiness and preconditions of national systems to report on progress towards the achievement of the SDGs; SAIs as role models by ensuring transparency and accountability in their own operations; and the contribution of SAIs to fight illicit fund transfers, which hinder the implementation of the SDGs.
Concrete INTOSAI efforts and initiatives to support SAIs in monitoring the implementation of the SDGs were mentioned, such as: