Technical Articles

International Journal of Auditing – April 2007

CAROSAI Convenes Its Seventh Triennial Congress in the Bahamas

The Caribbean Organization of Supreme Audit Institutions (CAROSAI) convened its seventh congress in the Commonwealth of the Bahamas, October 16-19, 2006, with the theme Towards Greater Accountability. Almost 40 delegates and observers from14 Caribbean supreme audit institutions (SAI); the SAIs of Cuba, the United Kingdom, and the United States; the INTOSAI Development Initiative (IDI); the INTOSAI Secretariat; the Organization of American States (OAS); and the Association of Char­tered Certified Accountants attended the congress.

Participants in the CAROSAI meeting in the Bahamas.
Participants in the CAROSAI meeting in the Bahamas.

Opening Ceremony

Perry Christie, the Prime Minister of the Bahamas, was the keynote speaker at the opening ceremony. Prime Minister Christie challenged the auditors to ensure govern­ment accountability for public funds. He described the need for the Bahamas to de­velop a professional class of public servants that can match the efficiency and expertise of the private sector. He also raised a concern about the importance of developing equitable funding sources for public sector infrastructure development that primarily benefits private sector projects.

Terrance Bastian, Auditor General of the host SAI, welcomed the delegates and observ­ers to the Bahamas. Mr. Bastian said that auditors general, as stewards of public funds and resources, should be held to the highest standards of accountability to enhance good governance. Mr. Bastian pointed out that the public is demanding the best pos­sible value for the use of public funds, and auditors general have a responsibility to en­sure accountability, transparency, and efficiency in the management of those resources. Mr. Bastian said that he hoped that as a result of attending the congress, the auditors would be in a better position to use the latest auditing techniques and technology to enhance service to parliaments and public sector entities.

Theme I: The Auditor’s Role in the Efficient Management of Public Funds

Veronica Brown, the Director of Audit for Antigua and Barbuda, presented the lead paper and summarized the country papers for theme I. Mrs. Brown described the in­dispensable role that SAIs play in enforcing a system of effective checks and balances in the control of public finances and accountability to the taxpayers for the management of those funds. According to Mrs. Brown, the legal mandate of SAI independence is the key principle that enables SAIs to accomplish their missions.

Mrs. Brown also outlined major structural impediments that some CAROSAI SAIs face in trying to maintain independence. These impediments include (1) the need for SAIs to obtain budgets and staffing levels from the Ministry of Finance, (2) SAI staff appointments made by the Public Service Commission, and (3) SAIs’ lack of direct control over the acquisition of their own technological resources. In the plenary ses­sion, participants discussed the need for clear and transparent protocols for making SAI reports public and the need for legal support for value-for-money audits.

Theme II: Modernizing SAIs’ Administrative and Auditing Methods in the Electronic Age

Antonette Hodge from St. Kitts and Nevis led the discussion of modern auditing in an age of explosive technological development, including the advantages of and obstacles to relying on computers as the primary instrument for accessing information and stor­ing documents. There was consensus that computers can make auditing more efficient by providing faster access to readily available information.

Participants discussed the major challenges that computers pose for CAROSAI SAIs. First, the costs of modernization, keeping new technology current, and updating computer security require new dedicated revenue for information technology. Also, it is difficult to hire and retain audit staff with the necessary computer skills.

Theme III: Corruption and Money Laundering–-Challenges to Good Governance

Albert Edwards, Auditor General of St. Kitts and Nevis, led the discussion on money laundering. The delegates identified the fight against corruption and money laundering as a leading issue for Caribbean nations. While SAIs are not anticorruption specialists, they play a pivotal role in deterring and detecting corruption and money laundering. For example, SAIs can ensure that their officers comply with codes of professional conduct as well as conflict-of-interest reporting requirements. Moreover, SAIs can and should report all material instances of wrongdoing to the appropriate regulatory and investigative agencies.

The delegates had a spirited discussion regarding the difficulty of combating corrup­tion in businesses possessing substantial financial resources. In addition, the central bank has the primary responsibility for combating money laundering in several coun­tries, but SAIs often have no authority to audit the central bank. Several SAIs men­tioned the importance of having legally mandated whistleblower protection.

Linda Fealing, the Inspector General for the OAS, discussed OAS efforts to combat corruption, in particular the Inter-American Convention against Corruption, which the OAS adopted in 1996. The convention is designed to promote and strengthen member state mechanisms to prevent and eradicate corruption. Ms. Fealing also de­scribed the OAS Secretary General’s efforts to mitigate the risk of fraud and corruption in OAS’s general secretariat and the role of the inspector general’s office.

Theme IV: Contribution of Auditing Standards and Procedures to Enhancing the Uniformity and Quality of Audit Work

Adrian Strachan, the Auditor General of Jamaica, began his presentation by noting that auditing standards provide an essential analytical framework to ensure that audit work is carried out with independence, integrity, and objectivity. With the rapid pace of globalization and the need to conduct audits across national boundaries, Mr. Strachan emphasized the need for an international consensus on generally ac­cepted auditing standards. He made it clear, however, that a consensus cannot emerge until there is universal agreement on fundamental concepts, such as the definition of what constitutes an audit.

Participants also recognized that several highly publicized events involving question­able ethical behavior by auditors---in cases such as ENRON and WorldCom--have un­derscored the importance of periodic outside reviews of SAIs’ internal control systems. In this regard, it was pointed out that U.S. Government Auditing Standards require audit organizations to have an external peer review at least every 3 years. Participants discussed whether CAROSAI could arrange a system of peer reviews for its members and generally agreed on the importance of having the results of each peer review ac­cepted by international organizations.

Theme V: The Role of the Public Accounts Committee

Sir John Bourn, the Comptroller and Auditor General of the United Kingdom (UK), discussed the National Audit Office’s (NAO) role in supporting the UK Public Ac­counts Committee. The committee is chaired by a senior opposition member of Parlia­ment and is nonpolitical in that it focuses on recommendations about management improvements rather than policy. The public and press are invited to attend committee hearings. Panel questions are based on a brief that the NAO and the members’ own staffs provide to the committee. The NAO drafts the committee reports and follows up on its recommendations.

Training and Capacity Building

IDI presented its new strategic vision for 2007-2012 and discussed its training activi­ties in CAROSAI and other INTOSAI regions. IDI also discussed its current
e-learning effort with the INTOSAI Information Technology (IT) Audit Commit­tee. This effort entails the development of a 20-hour e-learning course on IT controls planned for three INTOSAI regions—ASOSAI, AFROSAI-E, and CAROSAI.

Dan Duguay, Auditor General for the Cayman Islands and Chair of the Regional In­stitutional Strengthening Committee (RISC), presented RISC’s accomplishments and future plans. Mr. Duguay noted that as a result of the committee’s work, (1) financial and IT courses were developed and delivered with funding from the Inter-American Development Bank, (2) two master’s degree classes were completed with funding from the Canadian Development Fund, and (3) computers were purchased locally for vari­ous SAIs in the region.

Key Emerging Issues for SAIs

David M. Walker, Comptroller General of the United States, urged SAIs to supple­ment their traditional audit responsibilities by providing government officials with foresight about key emerging issues. Mr. Walker stated that SAIs are uniquely po­sitioned to discuss these emerging trends in a professional, objective, fact-based, nonpartisan, fair, and balanced manner. Some of the key emerging issues Mr. Walker discussed were long-range fiscal challenges, globalization, new security threats, climate change, and natural disasters. Mr. Walker also discussed the importance of working toward global convergence on major accounting and auditing standards.

Other Business

A memorandum of understanding (MOU) was signed by CAROSAI, the NAO, and IDI. The MOU continues an agreement between the signatories to work together to strengthen Caribbean SAIs through regional training and support for capacity-building initiatives.

Other Activities

Delegates and guests enjoyed the hospitality and graciousness of the host SAI. They attended a dinner reception hosted by the Governor-General of the Bahamas, Arthur Dion Hanna, at Government House. Participants also had the opportunity to visit the Atlantis Resort on Paradise Island and toured the world-famous Atlantis aquarium. Finally, on Wednesday evening delegates attended an evening of dinner, dancing, and entertainment on Sandals Island.

For additional information, contact the Department of the Auditor General of the Bahamas:

Fax: ++1 (242) 322 6420