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International Journal of Government Auditing:

October 2004:

Vol. 31, No. 4:

Š2004 International Journal of Government Auditing, Inc.

The International Journal of Government Auditing is published quarterly 
(January, April, July, October) in Arabic, English, French, German, and 
Spanish on behalf of INTOSAI (International Organization of Supreme 
Audit Institutions). The Journal, which is the official organ of 
INTOSAI, is dedicated to the advancement of government auditing 
procedures and techniques. Opinions and beliefs expressed are those of 
editors or individual contributors and do not necessarily reflect the 
views or policies of the organization.

The editors invite submissions of articles, special reports, and news 
items, which should be sent to the editorial offices at U.S. Government 
Accountability Office, Room 7814, 441 G Street, NW, Washington, D.C. 
20548, U.S.A. (phone: 202-512-4707; fax: 202-512-4021; e-mail:

Given the Journal's use as a teaching tool, articles most likely to be 
accepted are those that deal with pragmatic aspects of public sector 
auditing. These include case studies, ideas on new audit methodologies, 
or details on audit training programs. Articles that deal primarily 
with theory would not be appropriate.

The Journal is distributed to INTOSAI members and other interested 
parties at no cost. It is also available electronically at and by contacting the Journal at

Articles in the Journal are indexed in the Accountants' Index published 
by the American Institute of Certified Public Accountants and included 
in Management Contents. Selected articles are included in abstracts 
published by Anbar Management Services, Wembley, England, and 
University Microfilms International, Ann Arbor, Michigan, U.S.A.

October 2004:

Vol. 31, No. 4:



News in Brief:

Who Audits the Auditor?

Looking to the Future: E-learning and SAIs:

Developing International Auditing Standards:

VIII ARABOSAI General Assembly:

Audit Profile: Botswana:

Reports in Print:


IDI Update:

[End of contents]

Board of Editors:

Josef Moser, President, Court of Audit, Austria:

Sheila Fraser, Auditor General, Canada:

Faiza Kefi, Premier Président, Cour des Comptes, Tunisia:

David M. Walker, Comptroller General, United States:

Clodosbaldo Russian Uzcategui, Comptroller General, Venezuela:


Helen H. Hsing (U.S.A.)


Donald R. Drach (U.S.A.)

Assistant Editors:

Linda J. Sellevaag (U.S.A.);

Alberta E. Ellison (U.S.A.)

Associate Editors:

Office of the Auditor General (Canada);

Khalid Bin Jamal (ASOSAI-India);

Luseane Sikalu (SPASAI-Tonga);

Michael C.G. Paynter (CAROSAI-Trinidad and Tobago);

EUROSAI General Secretariat (Spain);

Khemais Hosni (Tunisia);

Yadira Espinoza Moreno (Venezuela);

INTOSAI General Secretariat (Austria);

U.S. Government Accountability Office (U.S.A.);


Sebrina Chase (U.S.A.)

Members of the Governing Board of INTOSAI:

Yun-Churl Jeon, Chairman, Board of Audit and Inspection, Korea, 

Arpád Kovács, President, Allami Számvevöszék, Hungary, First Vice-

Osama Jaffer Faqeeh, President, General Auditing Bureau, Saudi Arabia, 
Second Vice-Chairman;

Josef Moser, President, Rechnungshof, Austria, Secretary General;

Arah Armstrong, Director of Audit, Audit Department, Antigua and 

Valmir Campelo, Ministro, Presidente do Tribunal de Contas da Uniăo, 

Leopold A.J. Ouedraogo, Inspecteur Général d'Etat, Burkina Faso;

Mohamed Gawdat Ahmed El-Malt, President, Central Auditing Organization, 

Vijayendra N Kaul, Comptroller and Auditor General, India;

Tsutomu Sugiura, President of the Board of Audit, Japan;

Bjarne Mřrk Eidem, Auditor General, Riksrevisjonen, Norway;

Genaro Matute Mejía, Contralor General, Contraloría General, Peru;

Alfredo José de Sousa, President, Tribunal de Contas, Portugal;

Pohiva Tu'i'onetoa, Auditor General, Audit Department, Tonga;

Faiza Kefi, Premier Président, Cour des Comptes, Tunisia;

Sir John Bourn, Comptroller and Auditor General, National Audit Office, 
United Kingdom;

David M. Walker, Comptroller General, Government Accountability Office, 
United States;

Guillermo Ramírez, President, Tribunal de Cuentas, Uruguay.




It is indeed a pleasure to have been invited to write this editorial 
for the Journal, and I welcome the opportunity to share some thoughts 
with colleagues in INTOSAI and the wider international community.

On July 1, 2004, I started my 12-year term as President of the Austrian 
Court of Audit. Concurrently, and consistent with the INTOSAI Statutes, 
I will also be serving as Secretary General of our organization for 
that period.

More than 50 years after its foundation in 1953, INTOSAI stands 
strongly as an international organization whose more than 180 member 
countries span the globe. INTOSAI can pride itself on the great number 
of accomplishments and goals that it has achieved, in which many of you 
have taken an active part.

As I look back on important milestones in INTOSAI's development, the 
Lima Declaration on Guidelines on Auditing Precepts, endorsed during 
the 9th International Congress in 1977, stands among the central 
contributions that INTOSAI has offered to auditing.

The Lima Declaration sets forth the philosophy and framework of 
government auditing, its core missions and functions, as well as 
guidelines and principles that are reflected today in the 
constitutional and legal frameworks of many member countries. During 
this period, INTOSAI has charted a course towards continuous 
improvement in government audit and the active promotion of government 
management around the world.

INTOSAI's progress has been steady, evolutionary, and evenly paced. 
Today, it extends its activities in a globalized context and transcends 
single issues and national, even regional, borders. Its development has 
been remarkable. It is a center of knowledge, information, and 
experience for the international audit community. It has produced a 
large amount of valuable knowledge in the most important fundamental 
fields of government audit, such as audit standards, accounting 
standards, internal control standards, and other professional 
guidelines. It has accomplished groundbreaking work and promoted 
professionalism in the missions we are called upon to accomplish. 
INTOSAI's successful achievements impressively document that we have 
been able to live up to our motto of "Mutual Experience Benefits All" 
and that we have realized that there is an ongoing need for continuing 
cooperation within INTOSAI as well as with outside partners.

As incoming Secretary General to this organization, I am committed to 
upholding INTOSAI's paramount principles, which have stood the test of 
time. They are:

* the equality of its members, regardless of their size, origin, 
financial strength, or stage of development;

* unity in diversity, a feature that has always enriched our 
interchange and dealings with one another, uniting different systems of 
audit and different approaches, philosophies, cultures, and values; 

* democracy, the most essential ingredient and backbone of every true 
system of government audit, INTOSAI's nonpolitical orientation, as well 
as the national sovereignty of member SAIs, regional autonomy, and 
balanced representation.

As I familiarize myself with the tasks and expectations awaiting me, I 
will ensure continuity and uphold time-proven traditions. At the same 
time, I see a need to blend old virtues with the needs and requirements 
of modern times. It is heartening to note that SAIs worldwide face a 
number of emerging issues and the perennial challenges associated with 
improving good government: tightening budgetary constraint and the 
related need to ensure even better use of public funds, improved 
accountability and transparency in the interest of taxpayers and those 
we serve, good governance, and a better public understanding of our 
roles and missions both at the national level and in globalized 
settings. These constraints and challenges have not halted at the door 
of our organization. This is why INTOSAI has developed a strategic plan 
that is to streamline and restructure the organization and equip it for 
the challenges of the 21st century. By sharing information and 
knowledge on an even wider scale, rationalizing our financial input 
with a view to the best possible value for money, setting an example as 
a model organization and learning from best practice, INTOSAI will, I 
am confident, go from strength to strength, creating benefit for all 
members, regardless of their level of development, affluence, or power, 
and redrafting the map of government audit in years to come.

As INTOSAI gears up for its next congress this October in Budapest, 
Hungary, I anticipate that this triennial gathering will be a platform 
for member SAIs from around the globe to strengthen and renew existing 
links, meet new colleagues and make new contacts, exchange ideas and 
experiences on subjects of common interest, and engage in lively 
debates with colleagues and friends under the umbrella of the big 
INTOSAI family. I am confident that the organization of this all-
important event rests in the most able hands, the president of the 
Hungarian State Audit Office, Dr. Arpad Kovacs, and his experienced 
team. As a newcomer to the INTOSAI family, I look forward to meeting 
colleagues and counterparts in Budapest who will certainly provide me 
with the guidance and counsel I may need for my mission as Secretary 
General. I look forward to gaining an insider's view of the workings, 
history, and future endeavors of INTOSAI, which will empower me to 
serve this organization to the best of my knowledge and belief in the 
interest of all of its members, the international audit community, 
befriended organizations, and the public at large.

As I take on the challenges of this mission, I feel fortunate that I 
can build on the strong foundation of my predecessor, Dr. Franz 
Fiedler, who has shared with me observations about the great value 
INTOSAI places on communication, cooperation, and knowledge. While I am 
devoted to continuing and enhancing this tradition and to ensuring a 
seamless transition, it is also my intention in the coming years to 
leave my own imprint on this organization and steer it safely, with 
foresight and circumspection, through the challenges of the upcoming 
decade. As Secretary General, my policy will be one of open ears and 
open doors for the concerns of all of our members, trying to remain at 
the pulse of the organization's most pressing needs.

To achieve these ambitious objectives, I call on all INTOSAI members to 
involve themselves actively and lend their full support to INTOSAI's 
activities and program and to make their contributions to resolving the 
issues and challenges we are facing. I am confident that by leading by 
example and guiding INTOSAI on its way to a genuine model organization, 
we will all--at the end of the day--together have made a difference 
consistent with our motto, goals, and aspirations.

[End of article]

News in Brief:


Death of SAI President:

On July 9, 2004, Mr. William Dumazy, Senior President of the Belgian 
Court of Audit and Chairman of the INTOSAI Internal Control Standards 
Committee, unexpectedly passed away at the age of 57.

During his tenure as President of the Court of Audit, Mr. Dumazy 
launched an ambitious reform plan for the organization. A strong 
supporter of INTOSAI's objectives, he assumed the chairmanship of the 
Internal Controls Standards Committee in 2001 because he was convinced 
that SAIs have the responsibility to promote the establishment and 
review of internal control systems to improve government performance.

Mr. Dumazy was committed to developing further initiatives to enhance 
the concept of internal control. His latest proposals to the 
committee's project to update internal control guidelines are reflected 
in the draft action plan recently sent to INTOSAI members.

The Belgian Court of Audit will always honor the memory of Mr. Dumazy 
with deep respect and gratitude and will carry forward his commitment 
to INTOSAI and, more specifically, to the Internal Control Standards 

For additional information, contact: Court of Audit, fax: ++32 (2) 551 
86 22; e-mail:; Web site:

[See PDF for image]

Photo caption: Mr. William Dumazy.

[End of figure]


Audits Promote Reform of National Budget System:

For the past 9 years, the National Audit Office of China (CNAO) has 
carried out annual audits of the implementation of the national budget. 
The audits have addressed how (1) the Ministry of Finance (MOF) 
organizes national budget implementation, (2) various departments of 
the State Council (Cabinet) carry out their budget plans, and (3) 
various provincial governments manage the national subsidies allocated 
to them by the national government.

The audits have focused on the reform of China's fiscal budget 
management system because of ongoing conflicts between the budget 
management and market economy systems resulting from the influence of 
the former planned economy. The objective of the Chinese fiscal system 
reform is to establish a socialist public finance system that gives 
full consideration to China's current conditions. The CNAO audits have 
made significant contributions to achieving this goal.

For example, the audits have addressed the issue of "out-of-account" 
funds. For historic reasons, the fees that Chinese governmental 
departments charged for administrative services they provided were not 
included in general budgets but rather were used by the governmental 
departments themselves. The CNAO recommended that all these funds be 
incorporated into the national budget and that if, as a result, any 
governmental department needed to increase its budget, it should apply 
for and be allocated the funds from general budgets. This 
recommendation has been implemented and, since 2003, the MOF has 
incorporated into its overall budget the administrative fees generated 
by the Ministry of National Resources, the Ministry of Commerce, and 22 
other departments. The MOF is to report periodically to the National 
People's Congress (NPC) on revenues and expenditures of out-of-account 
funds and be monitored by NPC members.

The specification of budget plans provides a second example of the 
CNAO's contributions to the reform of the Chinese fiscal system. During 
the audit of the MOF, CNAO found that some expenditures of the national 
budget approved by the NPC had not been specified to spending 
departments and programs and that extra expenditures often occurred as 
a result of additional budgets during the implementation process. This 
led to weak management of budget implementation and the lack of 
transparency in fund allocations, which in turn hindered the best use 
of fiscal funds. In 1999, the NPC and the State Council supported the 
CNAO proposal on the specification of budget plans.

Since 2000, a department-based budgetary system, according to which 
each governmental department or agency has its own separate budget 
plan, has been adopted in China. Starting from 2001, CNAO's national 
budget audits were prioritized based on promoting the establishment of 
the department-based budgetary system. However, during the audit of 
national budget implementation in 2003, CNAO found that the MOF and 
other departments had not specified funds totaling 38.115 billion RMB 
yuan to respective departments or programs in their annual budgetary 
plans, with unspecified funds accounting for 5.6 percent of total 
allocations. This finding suggested that the problem had not been 
thoroughly resolved.

To improve this situation, the CNAO proposed that the budgetary funds 
allocated at the beginning of the year be increased and that contingent 
reserves be enlarged. In accepting this proposal, the Standing 
Committee of the NPC required that the State Council report to the NPC 
any difficulties in allocating budgetary funds at the beginning of the 
year, along with the agencies and amounts involved. The State Council, 
in turn, asked the MOF to send case reports on any allocation 
unavailable at the beginning of the year as well as final accounts for 
its review. This reform had a significant influence on the balance of 
power among the NPC, the State Council, and the MOF in regard to budget 
allocations. It will further standardize the management of budgetary 
expenditures at the national level.

These two examples demonstrate that the objectives of CNAO's audits of 
national budget implementation not only disclose specific problems but 
also improve the Chinese budgetary management system by evaluating 
existing management weakness. By doing so, limited fiscal funds can 
then be placed in the most needed areas to ensure better overall 
controls and a more stable and smooth development of the national 

CNAO's 2003 Annual Report Submitted to the National People's Congress:

On June 23, 2004, Mr. Li Jinhua, Auditor General of China, presented 
the Report on Auditing of Central Budgetary Implementation and Other 
Fiscal Revenues and Expenditures in 2003 to the NPC, China's 

NPC Standing Committee members spoke highly of this year's audit report 
and affirmed the work of the CNAO. They also expressed their 
appreciation that the CNAO fulfills its responsibilities by overcoming 
difficulties and obstacles, practices administration in accordance with 
the law, and discloses even the toughest issues. The members demanded 
that all audit findings be investigated and dealt with, that relevant 
departments learn from the findings and make continuous progress by 
carrying out corrections and reform, and that new structural measures 
be introduced to prevent and solve potential problems. The Standing 
Committee members have also required that CNAO audits be strengthened 
to broaden and deepen audit disclosures and that performance audit be 
actively promoted to increase effectiveness in the use of public funds.

In its review report on the CNAO annual audit report, the Financial and 
Economic Committee of the NPC recommended that the State Council 
(China's Cabinet) urge the relevant departments and localities to take 
effective measures to address the root causes of the problems reported. 
In particular, for those major violations of laws--especially repeat 
violations--and irregularities, those in charge should be held 
accountable. Results of these corrective actions are to be reported to 
the NPC by the end of 2004. The review report also approved the CNAO 
recommendations for strengthening central budgetary management, saying 
that they were "suitable, feasible, and should be implemented."

For additional information, contact: International Department, 
National Audit Office of China, fax: ++86-10-6833 09558; e-mail:

Costa Rica:

Annual Report of the Office of the Comptroller General:

In accordance with the constitution of Costa Rica, the Office of the 
Comptroller General (CGR) must submit an annual report to the Congress 
at the beginning of each legislative term (May 1st every year).

The annual report is composed of four parts.

* The first part, "Opinions and Suggestions for Improving the 
Management of Public Resources," deals with the CGR's audit tasks 
during the preceding year.

* The second part analyzes and assesses the performance of public 
institutions during that year.

It also comments on areas of activity within the scope of the Costa 
Rican government and analyzes the public sector's financial position.

* The third part includes the accountability report of the CGR.

* The fourth part provides statistical information (charts, graphics, 
and matrices) that supplements the comments and analysis in the second 

The CGR's annual reports for 1998-2003 are available on the CGR Web 
site (; search for "Memoria").

For additional information, contact: CGR, fax: ++506 296 05 63; e-mail:


President Appointed to the Court of Audit:

Mr. Philippe Séguin was appointed First President of the French Court 
of Audit by the French Government on July 21, 2004.

Born in Tunis in 1943, Mr. Séguin entered the French Court of Audit in 
1970 as a junior auditor after graduating from the prestigious National 
School of Administration (ENA), which trains French senior civil 

From 1973 until 1974, he served as the official representative for the 
Secretary General of the President of the French Republic. He then 
became a Member of the Parliament for the Vosges area (in the east of 
France) from 1978 until 2002, with a 2-year break from 1986 until 1988, 
when he was Minister of Social Services and Employment. From 1993 until 
1997, Mr. Séguin was President of the National Assembly, the lower 
house of the French Parliament. Mr. Séguin was also the mayor of the 
town of Epinal in the Vosges area from 1983 until 1997.

[See PDF for image]

Photo caption: Mr. Philippe Séguin.

[End of figure]

In 2002, Mr. Séguin gave up his various political mandates and returned 
to the French Court of Audit, where he became senior magistrate in 
March 2003. The French government also appointed him to be a member of 
the Governing Body of the International Labor Office. In June 2004, he 
was named the chairman of the Governing Board of the International 
Labor Organization.

Mr. Séguin holds honorary doctorates from the University of Québec in 
Canada and from the universities of Coughborough (Great Britain) and 
Bucharest (Romania). He has also written several historical and 
political essays. He is married and the father of four children.

For additional information, contact: Court of Audit, fax: ++33 (1) 42 
60 01 59; e-mail:; Web site: 


New Legislation Enhances Independence of SAI:

In May 2004, the National Assembly of the Republic of Hungary amended 
the act regulating the activity of the State Audit Office (SAO) to (1) 
increase the SAO's fiscal and operational independence and (2) revise 
outdated provisions that were no longer applicable. In addition, the 
amendments now explicitly designate the SAO as the supreme audit 
institution of the Hungarian state. The new legal regulation also 
adjusted the SAO's audit powers to make them clearer and more precise.

The new provisions continue to strengthen the safeguards of the SAO's 
independence. Among other things, they allow the SAO to draw up its own 
draft budget, which is then to be submitted to the National Assembly 
without modification as part of the government budget bill. As a 
further safeguard for the SAO's independence, the power to define the 
SAO's workforce will be delegated from the National Assembly to the 
President of the SAO in the future.

Comprehensive Guidance on Public Audit Published:

Based on audit activities performed and experiences gained over the 
past 15 years and the results of fruitful international cooperation, 
the SAO recently published a one-volume comprehensive technical 
regulation for public audit. The material comprises the SAO's code of 
ethics, auditing precepts and standards, and audit manual. It was 
developed by adapting international best practice and building upon the 
Lima Declaration, INTOSAI's Code of Ethics and Audit Standards, and 
International Federation of Accountants standards. While the volume's 
contents have already guided the SAO's activity in the past, this is 
the first time that a single and complex technical regulation has been 
published in one volume.

For additional information, contact: State Audit Office, fax: ++36 (1) 
484-9201; e-mail:; Web site:


Head of SAI Killed:

The Board of Supreme Audit in the Republic of Iraq is saddened to 
announce that Mr. Ihsan K. Ghanim Al-Ghazi, its recently named 
president, was killed in a car bombing on July 1, 2004. Two of his 
associates were also killed with him.

As announced in the April 2004 Journal, Mr. Ghanim had served with the 
Iraqi Board of Supreme Audit since 1973. He was vice president of the 
Board from 1997 until his appointment as president of the newly 
constituted Board, which resumed its audit functions in April 2003.

For additional information, contact: Board of Supreme Audit, e-mail:

[See PDF for image]

Photo caption: Mr. Ihsan K. Ghanim Al-Ghazi.

[End of figure]


Fifth Meeting of Heads of SAIs of Commonwealth of Independent States 

From August 31-September 2, 2004, the SAI of Kazakhstan (the Accounts 
Committee for Control over Execution of the Republican Budget) hosted 
the fifth meeting of the heads of SAIs of the countries of the 
Commonwealth of Independent States (CIS). The theme of the session was 
the openness and transparency of SAIs and their interactions with 
different branches of government.

During the session, participants approved a declaration stating that 
openness and transparency are basic principles of SAI work and ensure 
that democratic principles in the management of the economy are fully 
implemented, government audit is efficient, and society is protected 
against corruption and other violations. The participants also approved 
model methodological recommendations for performance auditing and a 
glossary of terms to be used in the work of CIS SAIs.

For additional information, contact: Almagul Mukhamediyeva, fax: ++7 
(3172) 32 38 93; e-mail:


Court of Audit Celebrates 70th Anniversary:

The Court of Audit of Uruguay celebrated its 70th anniversary in August 
2004. The Court's antecedents date back to 1830, when the General 
Assembly established a three-member commission to "examine, close, and 
verify the annual accounts of the government." This concern to maintain 
a control function in the government resulted in an 1834 law that 
created two commissions, one in each chamber, to audit the accounts of 
the executive branch.

In 1880, the regulatory framework of the two audit commissions was 
unified. Throughout their history they functioned as one joint 
commission, with members from both chambers, and came to be known as 
the Legislative Audit Commission. Because some sectors of the 
Parliament realized that this structure was insufficient to control the 
operations of ministries and the Treasury, they began to envision the 
creation of a supreme Court of Audit that would be completely 
independent. There were many unsuccessful attempts to create an 
independent Court of Audit with an autonomous budget and specialized 
technical personnel.

The 1934 Constitution established the Court of Audit as the supreme 
audit institution and charged it to audit and monitor all matters 
related to the Public Treasury. The Constitution established the 
organization's fundamental bases, functions, and powers, which have 
remained virtually unchanged until the present day.

While the Court's essential functions have not changed over its 70 
years, the circumstances in which they are carried out today are very 
different than in the past. Most notably, the scope of the Court's work 
has broadened as a result of the government's increased participation 
in new activities as well as the need to audit para-state and private 
entities that receive or administer state resources and businesses in 
which the state has a controlling interest.

The broadened scope of work and the increase in technology applicable 
to government auditing have been particularly evident in the 
international sphere. Attention has been focused not only on standards 
for auditing, accounting, and internal control, but also on such areas 
as public debt, privatization, program evaluation, information 
technology, the environment, international institutions, and 
international money laundering.

Since the Court of Audit was founded in 1934, its unique character has 
been shaped by the multiple and constant challenges growing out of its 
efforts to meet the strict demands of its audit mandate and adapt to 
technological and juridical changes without losing the perspective and 
equilibrium necessary to function in a world undergoing rapid change.

The staff and management of the Court remain committed to this effort 
as they face the challenges of the future.

For additional information, contact: Court of Audit, fax: ++598 (2) 916 
75 07; e-mail:; Web site:

United States:

GAO Renamed Government Accountability Office:

In July 2004, new legislation changed the name of the U.S. General 
Accounting Office to the U.S. Government Accountability Office. The 
well-known GAO acronym will stay the same. The legislation also gave 
GAO new human capital flexibilities to help it attract and retain the 
skilled staff needed to serve Congress in the future.

GAO's work has changed considerably since its creation in 1921. In its 
early years, GAO primarily audited government vouchers and receipts for 
accuracy and appropriateness. After World War II, the agency began to 
do more comprehensive financial audits that examined the economy and 
efficiency of agency operations. By the 1960s, GAO began to do the type 
of work it is known for today--program evaluation of government 
programs to determine whether they achieve their objectives and meet 
the needs of society.

Today's GAO is a multidisciplinary professional services organization 
with a workforce of 3,200 career employees. GAO's diverse staff 
includes economists, social scientists, public policy analysts, 
attorneys, and computer experts, as well as specialists in fields 
ranging from health care to homeland security.

In testimony before Congress, Comptroller General David M. Walker said 
that the new name would more accurately reflect GAO's current role and 
mission in government. Walker pointed out that less than 15 percent of 
the agency's workload is traditional financial audits. He said that the 
new name would dispel the common misconception that GAO keeps the 
government's books and other financial records.

"Our activities are designed to ensure the executive branch's 
accountability to the American people," Walker said. "Indeed, the word 
accountability is one of GAO's core values, along with integrity and 

For additional information, contact GAO, fax: ++(202) 512-4021; e-mail:; Web site:

European Union:

New Members Join the European Court of Auditors:

On May 1, 2004, 10 countries acceded to the European Union (EU), 
enlarging the EU to 25 Member States. Based upon proposals by the 
national governments of the 10 new Member States and in consultation 
with the European Parliament, the European Council of Ministers 
appointed, as of May 7, 2004, the following Members to the European 
Court of Auditors (ECA) for a renewable period of 6 years: Mr. Jan 
Kinšt (Czech Republic), Ms. Kersti Kaljulaid (Estonia), Mr. Igors 
Ludboržs (Latvia), Ms. Irena Petruškeviciene (Lithuania), Mr. Gejza 
Halász (Hungary), Mr. Jacek Uczkiewicz (Poland), Mr. Josef Bonnici 
(Malta), Mr. Vojko Anton Antoncic (Slovenia), and Mr. Julius Molnar 
(Solvakia). The appointment of a tenth Member (from Cyprus) is still 
pending. On June 7, 2004, the nine new ECA Members gave a solemn 
undertaking regarding their independence before the EU Court of 
Justice, as foreseen in the EU treaties.

In view of this enlargement, the ECA has reviewed and revised its 
organizational structure and decision-making procedures. The 
principles underlying these changes can be summarized as follows:

Improvement of the ECA's decision-making procedure and enhancement of 
the role of the audit groups. The ECA has set up an Administrative 
Committee to handle administrative matters requiring a Court decision. 
This committee will operate alongside the four vertical audit groups 
and the horizontal audit group. This is intended to enhance the role of 
the audit groups, as foreseen by the Treaty of Nice.

Increased flexibility in the programming and implementation of the 
vertical audit groups' tasks. Although Members will continue to fully 
perform their roles in the ECA within both their respective audit 
groups and the College, they are no longer in charge of audit in a 
specific field of policy. Instead, they are responsible for individual 
audit tasks entrusted to them by their group or the College. The 
concept of a sector has been abandoned, and the groups are now 
organized into divisions.

Each vertical audit group draws up its annual work program in 
accordance with guidelines laid down by the College. The tasks are then 
entrusted to audit teams within the divisions, under the responsibility 
of a Member rapporteur.

Deans will be appointed by the group Members for 2-year renewable 
terms. With the agreement of group Members and the Director's 
assistance, the Deans will coordinate group tasks and may assume 
related audit responsibilities.

The new structure can be found at 

For additional information, contact: ECA, fax: +352 4398-46430; e-mail:; Web site:

[End of News in Brief]

Who Audits the Auditor? The International Peer Review of the Office of 
the Auditor General of Canada:

By Andrew Ferguson and Bill Rafuse, Office of the Auditor General of 

A fundamental goal of the Office of the Auditor General of Canada (OAG) 
is to promote good governance in Canada's federal government 
departments and agencies. Following through on its commitment to good 
governance in its own work, the OAG underwent an external review of its 
financial audit practice in 1999. Auditor General Sheila Fraser took 
the next logical step in 2002-2003 and formally committed the OAG to 
undergo an external review of its performance audit practice by 2005. 
This article summarizes the process that was followed to carry out that 

The purpose of the review was to assess the extent to which the OAG's 
performance audit practice reflects recognized professional standards 
and is operating effectively to produce independent, objective, and 
supportable information that Canada's Parliament can rely on to examine 
the government's performance and hold it to account.

The OAG's peer review was the first time the legislative audit practice 
of an SAI was assessed by a team of its international peers. The review 
was carried out in accordance with commonly accepted auditing 
principles over the course of a year by a team led by the United 
Kingdom's National Audit Office with representatives from the SAIs of 
Norway, the Netherlands, and France. The U.S. General Accounting Office 
(now the Government Accountability Office) participated as an observer 
and prepared a lessons learned report on the process.

Preparing for the Review:

Planning for the peer review began in earnest in late 2001, led by the 
OAG's Professional Practices Group. The first step was consolidating 
the observations and findings of all recent reviews, reports, and 
action plans related to the OAG's performance audit practice and 
updating the status of their recommendations. Lessons learned from the 
1999 external review of the financial audit practice were documented, 
and the external review practices of several SAIs were reviewed to 
identify good practices.

In January 2002, the results of that work were presented to the OAG's 
Executive Committee, which recognized that all of the office's 
committees concerned with the performance audit practice would have to 
be involved in preparing for the review. The most important committee 
was the Practice Development Committee, which is responsible for 
approving policy, guidance, and methodology related to performance 
audits. The Audit Committee was assigned an oversight role, and the 
Auditor General's Panel of Senior Advisors provided independent advice. 
A small internal working group with membership from across the office 
was also created to keep employees informed and to provide guidance and 
advice as the preparations progressed.

On the advice of her panel, the Auditor General decided to extend the 
review to all performance audit work included in her periodic reports 
to Parliament for 2003, with the external review team reporting back to 
her early in 2004. That decision effectively limited the preparation 
period to 8 months.

The Executive Committee agreed that the reviewers should assess the 
design and operation of the quality management framework (QMF), the 
policies and procedures that govern the OAG's performance audit 
practice. The next step was to determine what policy and practice 
changes were needed to be "review ready" by January 2003. The OAG 
recognized that because continual improvement is a basic part of the 
quality management process, the review could not wait for the audit 
practice to reach a "steady state." However, it also understood that 
some improvements should probably be accelerated. The Professional 
Practices Group asked the OAG's Assistant Auditors General for their 
input and, in June 2002, presented the major opportunities for 
improvement to the Executive Committee. A proposal to develop and 
implement these changes was approved in July, followed in August by an 
implementation plan outlining the necessary methodology projects, 
internal practice reviews, consultation, and training.

A communications plan was developed to inform and engage employees at 
all phases of the review. As preparations for policy and methodology 
changes moved into high gear, communications were targeted to the audit 
practitioners who would be affected most directly by the review. This 
included e-mails to alert them of pending changes to the performance 
audit manual, practice advisories to provide guidance as changes were 
approved, training sessions, and events such as the OAG's annual 
performance audit symposium.

In September 2002, the Professional Practices Group undertook an 
internal practice review "blitz" to assess adherence to policy, 
identify opportunities for improvement, and provide the Auditor General 
with assurance that the performance audit practice was robust.

At the direction of the Executive Committee and concurrent with the 
internal review and methodology initiatives under way, the OAG engaged 
consultants to carry out several separate examinations of the office's 
performance audit policies and practices. The objective was to get an 
outside opinion to validate whether the OAG's own assessment of its 
policies and practices was accurate.

In this initiative, the offices of the Auditors General of British 
Columbia and Quebec each completed a review of OAG performance audits. 
The OAG also contracted with an outside consultant to carry out a gap 
analysis of its QMF relative to the Quality Management Standard 
promulgated by the International Organization for Standardization 
(ISO). Finally, the London School of Economics' Enterprise LSE Ltd. was 
engaged to evaluate two of our products using their criteria for 
performance audit reports.

Preparations for the peer review concluded with the launch of a revised 
performance audit manual in December 2002. The revised manual 
represents the culmination of an intensive period of action that was 
sustained by the leadership of the Executive Committee, the hard work 
of the Professional Practices Group, and, most importantly, the strong 
support of practitioners and audit services employees across the 

In December 2002, the Auditor General met again with Parliament's 
Public Accounts Committee to brief its members on plans for carrying 
out and reporting on the peer review. The Committee expressed its 
support for the peer review process and, in particular, for the Auditor 
General's plans to publicly report the results.

Establishing the Ground Rules for the Review:

In February 2003, the OAG asked members of INTOSAI if they would be 
interested in participating in a peer review of the OAG's performance 
audit practice. There were a number of important reasons why the 
Auditor General decided to engage the international audit community and 
to adopt a peer review model for the external review of the OAG's 
performance audit practice.

First, it was considered critical that the review team be free and 
appear to be free of any conflict of interest or other impairment to 
its independence. This ruled out a fee-for-service arrangement, such as 
a contract with a local consulting or accounting firm. The option of 
forming a team of representatives from Canada's provincial auditors 
general was also ruled out since several of their audit offices 
participate with the OAG in other endeavors, including practice 

Second, it was essential that those engaged in the review be competent 
to perform the necessary work. Many members of the international audit 
community have mandates similar to the OAG's and have been engaged in 
performance audit work for decades. SAIs understand the mechanics of 
legislative audit at the national level and possess the knowledge, 
experience, and skills required to carry out the work.

Finally, it was important that the approach adopted for the review be 
widely understood and recognized as credible.

A Focus on Independence, Objectivity, and Reliability:

Within a few weeks, several SAIs had expressed interest, and in late 
February 2003 the group met to discuss how a peer review of an SAI 
could be carried out.

It quickly became apparent that other SAIs might also be interested in 
undergoing a peer review. Early discussions therefore centered on 
values and principles that SAIs share and that could form the basis of 
a common approach to peer reviews of SAIs.

After considerable discussion, the peers agreed that a principles-based 
approach focusing on independence, objectivity, and reliability should 
be acceptable to all SAIs contemplating a peer review. Beyond those 
shared principles, it was agreed that SAIs should be assessed against 
the standards of professional practice applicable in their home 
countries and that peer reviews should be carried out in accordance 
with commonly accepted auditing principles consistent with INTOSAI's 
Code of Ethics and Auditing Standards.

The peers also agreed that SAIs should be free to specify supplementary 
criteria for their own peer review should they wish to do so.

[Sidebar: Independence, competence, and credibility were prerequisites 
for the review team and the process.]

Discussions progressed to the practical considerations of performing 
peer reviews, including details such as the level of effort involved, 
leadership, methodology, objectives, scope, and criteria.

The peers agreed it was crucial that peer reviews be tightly focused 
and professionally executed so that the level of effort and the 
financial resource requirements would not be unnecessarily burdensome 
to either the reviewers or the reviewed SAI. If the peer review process 
were to prove too burdensome, the appetite for performing or undergoing 
one would quickly fade. It was agreed that an SAI should request a peer 
review only after a thorough self-assessment demonstrated the audit 
practice and the organization to be review-ready.

The peers also agreed that some advance work could be done to manage 
the level of effort involved. First, peers could examine the documented 
management framework underpinning the SAI's audit practice to determine 
whether obvious gaps existed between the documented practice 
requirements and the key principles of independence, objectivity, and 
reliability or the standards of professional practice applicable in the 
SAI's country. The peer reviewers could carry out a design assessment 
relatively quickly at their respective home offices to identify matters 
that the SAI should address before undergoing a full peer review.

Second, the SAI's internal practice review function could be assessed 
to determine whether the peer review could rely on it to provide 
assurance of the SAI's compliance with applicable professional 
standards. If a high degree of reliance was indicated, the peer review 
could then focus on whether critical processes and controls that 
support the fundamental attributes of a good performance audit 
practice--independence, objectivity, and reliability--were operating 

The peers also agreed that an important aspect of peer reviews would be 
the learning experience they afford for all concerned. It was agreed 
that peer reviews should be carried out in a collegial manner, with 
open and transparent communication between the review leader and the 
reviewed SAI throughout the process. There should be no surprises.

Thus, the peers agreed on an open, transparent peer review process with 
three key elements:

* design assessment--to determine whether the management framework 
underpinning the SAI's performance audit practice reflects applicable 
professional standards and appropriate measures to ensure that the 
products of the practice are independent, objective, and reliable;

* reliance assessment--to determine whether the SAI's own practice 
review/inspection function provides assurance that the practice is 
operating in compliance with the SAI's policy expectations and 
applicable professional standards; and:

* implementation assessment--to determine whether the performance audit 
practice is operating effectively to provide users with independent, 
objective, and reliable information.

[Sidebar: The peers agreed that such reviews should:

* examine both the design and the operation of the SAI's audit 

* focus on key controls related to independence, objectivity, and 

* use the standards of professional practices applicable in the SAI's 
own country; and:

* be carried out in a collegial manner so as to maximize learning for 
all concerned.]

Assembling the Team and Performing the Peer Review:

The peers met again in April 2003 to plan the necessary work for the 
Canadian peer review, including details of the approach, process, and 
administrative arrangements. In May 2003, the OAG and the review team 
signed a memorandum of understanding to officially launch the process. 
Each participating SAI agreed to assign two senior-level performance 
auditors to the review team. As the reviewed SAI, the OAG agreed to 
cover the costs of the team's travel and accommodation in accordance 
with its own policies and regulations.

The first component of the review--the design assessment--began in June 
2003. The peer review team examined the OAG's quality management 
framework (QMF). The team examined the direction available to audit 
practitioners to determine whether it reflected applicable standards of 
professional practice and the legislative authorities in the Auditor 
General Act. The team also looked for mechanisms in place to ensure due 
regard to economy and effectiveness in the conduct of the OAG's work.

The reliance assessment also took place in June. It focused on the 
OAG's practice review function to determine whether it could be relied 
upon to provide assurance of compliance with the QMF.

The implementation assessment began in early July, when the review team 
selected the first sample of performance audit files to examine. The 
implementation assessment focused on whether the QMF for the 
performance audit practice operated effectively to meet its goals of 
producing independent, objective, and reliable information and ensuring 
that the work is carried out with due regard to economy and 

During the implementation assessment, the peer review team met three 
more times over 5 months to compare notes and discuss preliminary 
findings and recommendations. Members also communicated regularly by e-
mail and telephone.

In November 2003, the peer review team spent 2 weeks at the OAG's 
Ottawa headquarters conducting interviews and focus groups with 
performance audit practitioners, functional area leaders, subject 
matter specialists, and senior executives. The discussions were 
intended to confirm the peers' understanding of the key elements of the 
QMF and to verify that management and staff clearly understood their 
roles and responsibilities in its effective operation.

The peer review team presented its initial findings to the OAG's 
Executive Committee at the end of November 2003 and completed its 
report in February 2004. The team concluded that the OAG's performance 
audit practice was suitably designed and operating effectively to 
achieve its objectives.

Responding to the Peer Review Report:

The peer review report and the action plan the OAG prepared to address 
the suggestions for improvement were tabled at a meeting of the Public 
Accounts Committee in March 2004. They are available on the OAG's Web 
site (

In developing its action plan, the OAG identified senior-level 
"champions" with leadership responsibility for each action item. The 
OAG's Executive Working Group for Strategic Planning assumed oversight 
responsibility for implementation of the action plan and called for 
quarterly progress reports on the status of each action item. Overall 
progress on the action plan will be reported periodically to the OAG's 
Executive Committee and publicly in the OAG's annual performance 

Lessons Learned:

The peer review of the OAG's performance audit practice demonstrated 
that an international team can perform an external review that will 
satisfy appropriate standards, provide value to the reviewed 
organization, and afford a learning experience for review team members 
and the reviewed SAI alike.

However, the decision to undergo a peer review should not be taken 
lightly. The review and preparations for it require careful 
consideration and management by both the reviewed SAI and the review 
leader. SAIs contemplating a peer review should note that the process 
requires a significant investment of financial and human resources for 
the international peers involved and for the reviewed SAI. The OAG has 
estimated that the peer review of its performance audit practice cost 
about Canadian $800,000 over the 2-year period.

Still, the OAG believes the investment in peer review was worth the 
effort. It is pleased with the new relationships the process has 
fostered and the overall outcome. In its report to the House of 
Commons, the Public Accounts Committee said the following:

Having independent and external confirmation of the soundness of the 
Office's value-for-money practices provides additional assurances 
about the integrity of the accountability process of the Office of the 
Auditor General of Canada and adds credibility to its efforts to 
provide objective, supportable and reliable information on the 
administration of government programs and activities.

The Committee wishes to emphasize the excellent work that the Auditor 
General and her Office consistently provide in supporting all 
Parliamentarians in their efforts to hold Government to account. 
Canadians can take a great pride in knowing that the Office of the 
Auditor General has set and maintained high standards of 
professionalism and dedication to its responsibilities.

That was exactly the result the OAG had aimed for.

For more information, contact the author at

[End of article]

Looking to the Future: E-learning and SAIs:

By Patrick Callaghan, Information and E-learning Manager, INTOSAI 
Development Initiative:

E-learning is the combination of training with technology. Although 
used only to a limited extent by SAIs at present, e-learning offers the 
potential to widen the availability and effectiveness of quality 
training products. This article gives an overview of how e-learning 
could affect the future learning environment in SAIs and the steps the 
IDI has taken to date toward developing an e-learning strategy.

The IDI's Mandate to Investigate Distance Learning Programs:

Learning is vital to the health of SAIs, and INTOSAI recognized its 
crucial role when it established the INTOSAI Development Initiative 
(IDI) in 1986. Since that time, the IDI has worked with SAIs at the 
regional and local levels to facilitate quality training and capacity-
building on key audit and management issues. In goal 5 of its Strategic 
Plan 2001-2006, the IDI is charged with the task of exploring the 
potential of distance learning programs, including e-learning, to 
enhance training and capacity building in SAIs.

This article uses the term e-learning as a shortened way of saying "e-
learning or blended learning." It is worth clarifying the meaning of 
both of these terms.

E-learning can be defined as learning through information and 
communication technologies, including the Internet. Many companies 
offer commercial e-learning solutions, from software that allows 
organizations to seamlessly integrate their human resource, personnel, 
and personal development systems, to companies that design and host 
individual courses. E-learning can also be delivered using corporate 
intranets (internal Internet-based systems) or stand-alone computers or 
be published on CDROM.

Blended learning is a fairly new concept that merges elements of e-
learning and classroom learning into a "blend" that suits the 
circumstances of a particular training intervention. For example, a 
course might begin with a videoconference, after which participants 
carry out group exercises using Internet pages and Internet-based 
discussion forums or chat rooms. There could be a second 
videoconference followed by individual home study and coursework 
supported by online instructors and ending with a short classroom 
meeting. Many people see blended learning as the way forward because it 
is the most flexible approach to training.

E-learning Is a Logical Next Step for SAIs:

In some sectors, e-learning has a reputation for being expensive to 
develop, and some wonder whether it is worth pursuing at all. It is 
certainly true that e-learning had an inauspicious start and that there 
have been many examples of failed implementation. Fueled particularly 
by the North American corporate market in the 1980s and 1990s, e-
learning companies anticipated huge profits. Some corporations closed 
down internal training departments in favor of buying "off-the-shelf " 
e-learning solutions. However, in many cases student enrollment and 
retention were poor. The reasons for this were obvious: these 
commercial e-learning products were designed for the corporate market, 
which often encompasses numerous professions and corporate business 
styles. So, for example, generic courses on performance management, 
human resources, and change management proved to be almost useless 
because they did not reflect the circumstances of individual 

E-learning does, however, have its success stories, and it does have 
applications that can benefit SAIs. Courses that highlight aspects of 
specific legislation or cover more narrowly defined aspects of 
professional and personal development can be important additions to 
other organizational training. In recent years, e-learning has had 
increasing acceptance as a result of its ability to mimic the 
pedagogical successes of classroom training while offering significant 
economies of scale, including financial savings. If, for example, an 
SAI has 1,000 auditors in several regional offices, all of whom need to 
be trained in performance auditing, the development of an e-learning 
course may be a viable solution. If the course is designed and 
delivered well and staff have access to appropriate technology, e-
learning is a potentially useful way of approaching such large-scale 
training programs. Within the IDI context, there is little doubt that 
e-learning offers economies of scale, particularly in the different 
English-speaking regional working groups, where SAIs from multiple 
regions could be invited to participate in the same courses.

Investigation on E-learning within International Organizations:

As the IDI has begun to explore the potential of e-learning, it has 
considered possible barriers to success within the INTOSAI community, 
including the lack of access to technology. The IDI has identified 
several international organizations that have developed mature e-
learning solutions that INTOSAI might be able to benefit from in the 

To better understand how barriers to e-learning could be lowered, the 
IDI met with several international organizations in October 2003. The 
response from these institutions was largely positive, and future 
partnerships may eventually be developed. The World Bank's Global 
Development Learning Network (GDLN) centers provide a good example of 
options for collaboration. GDLN centers have been established in more 
than 60 mostly developing countries, with mixed regional coverage, and 
there are plans to expand the number significantly in the coming years. 
The centers have fully supported videoconferencing and Internet 
facilities for use by stakeholders, and these are backed up with fast 
telecommunications networks. These facilities make training through 
videoconferencing and/or e-learning a viable prospect in those 

E-learning Pilot Workshop in 2004/2005:

The IDI is currently fulfilling its mandate to test the potential for 
e-learning through a planned activity with one regional working group. 
The IDI will fund the design and delivery of a performance auditing 
course in the pilot region during 2004 and 2005. The project will be 
delivered in partnership with a development organization based in that 
region and will use its established e-learning product.

The course will be delivered completely online using the Internet, chat 
rooms, e-mail, and discussion forums. Although the design and course 
administration will be handled by the partner development organization 
(with subject matter support from the region), the course staffing will 
come from within the region itself. The staffing commitment is 
significant--the region will need to provide a subject matter expert to 
advise the designers, a course coordinator with knowledge of the 
subject to oversee the delivery, and at least four tutors to manage the 
student experience on a daily basis. The course will be aimed at 60 
participants from over 10 countries who will be expected to devote 
about 10 hours a week to this training course for 8 to 10 weeks.

At the end of the pilot, the IDI and pilot region will assess the 
success of the e-learning course. While there are sure to be many 
lessons to learn from such a new and demanding project, the project 
partners have high hopes that this will be the first of many such e-
learning courses. A pilot with 50-60 successful participants will be a 
clear demonstration of the economies of scale that e-learning offers. 
Furthermore, as long as enough suitable tutors can be found to manage 
the learning environment, there is no limit to the number of students 
who can take the course at any one time in the future.

The IDI Will Develop E-learning Guidelines for SAIs:

The IDI is committed to the development of e-learning guidelines for 
SAIs. The IDI's general guidelines for SAI trainers (see http:// guidelines01.asp) already exist. These 
guidelines promote the IDI's systematic approach to training and 
provide in-depth information on the five stages of that approach 
(analysis, design, development, delivery, and evaluation). Although the 
five step approach can be the same within the e-learning environment, 
the attributes of each step will be different, and new guidelines will 
need to be developed to reflect these differences. Also, the e-learning 
guidelines will need to be an ongoing project in order to adapt to 
changes in the e-learning market.

Other Potential Benefits of E-learning Programs for SAIs:

Exploring the potential of e-learning is not just about putting theory 
into practice but also about theorizing and modeling. Exploration is a 
powerful word that creates images of journeys into the unknown or 
scientific research. In the IDI context, exploration is also about 
finding solutions to problems and discovering new methods of working, 
even when the existing methods appear to be working well.

Over the course of the next 2 years and beyond, the IDI may also 
investigate several other facets of e-learning. While the IDI cannot 
commit to any of these potential projects at this time, they are in the 
forefront of its organizational thinking on e-learning.

E-learning Training Leading to Qualifications:

One of the most significant reasons learners drop out of e-learning 
courses is a lack of motivation. Learners are generally more motivated 
if they know they will receive a recognized qualification at the end of 
a course, and the IDI has for some time wanted to pursue more long-term 
courses leading to accredited qualifications. However, this would 
require the full backing of the INTOSAI community to build modules in, 
for example, performance or financial auditing that would generate 
credits in masters programs at major academic institutes. The modules 
would have to be extremely robust to meet the requirements of academic 
institutions, and the design and development work would be time-
consuming. This is a vision for the future, and perhaps a distant 

Developing E-learning Courses within Regions and SAIs:

With the development of its Long Term Regional Training Program (LTRTP) 
in 1996--which has now been delivered at least once in all regional 
working groups--the IDI committed itself to establishing sustainable 
training infrastructures so that regional working groups will 
ultimately not have to look beyond the boundaries of their own regions 
to find the skills and experience to develop regional workshops. In 
many regions this is now a reality. The IDI is aware of the risks to 
regional sustainability and self-sufficiency in developing e-learning 
strategies. As there is a community of regional training specialists in 
each region, why not a community of regional e-learning developers as 
well? Tools for straightforward self-development are becoming more 
common and accessible (as well as cheaper and available in multiple 
languages). By giving suitable training and tools to the right people 
in regional working groups, the IDI could help develop regional 
capacity to develop national and regional e-learning courses.

Standardization of E-learning Products:

The e-learning market is slowly developing standards that, in the 
future, will give assurance that standardized e-learning products can 
be reusable. The standard that is favored to lead the way is SCORM 
(Sharable Content Object Reference Model), a specification that 
provides some assurance of accessibility, reusability, and 
interoperability for e-learning courses developed within a learning 
management system (LMS). An LMS is an integrated piece of software that 
manages the learning process, including tracking learner interactions, 
managing test results, and highlighting those learners not progressing 
through courses at the correct pace. In simple terms, SCORM-compliant 
systems should be able to reuse e-learning courses and modules. Within 
INTOSAI, one possible e-learning scenario would give SAIs the 
opportunity to swap e-learning modules. In the IDI context, that would 
be a significant goal. Just as the IDI has opened access to quality-
assured classroom course materials through its International Training 
Directory (see, SAIs 
would maximize the value of their e-learning creations to the INTOSAI 
community by developing a series of SCORM-compliant e-learning objects. 
In the future, the IDI will consider drafting guidance to SAIs on the 
development of standardized e-learning objects.

This article has attempted to identify only a few of the many e-
learning issues relevant to the SAI context at this time. Since e-
learning is a constantly changing discipline, market, and profession, 
the IDI's course of action is defined (by its strategic plan) only 
until the end of 2006. In the future, the IDI will continue to follow 
policies that represent the wishes of SAIs in developing countries. 
While the role of e-learning within any new IDI strategy is unclear at 
this time, the IDI will certainly be prepared to face the e-learning 
challenges of the future.

For additional information, contact the author at

[End of article]

Developing International Auditing Standards: Cooperation between 
INTOSAI and the International Federation of Accountants:

By Kelly Ĺnerud, Deputy Director General, Office of the Auditor General 
of Norway:

The recent memorandum of understanding between INTOSAI's Auditing 
Standards Committee (ASC) and the International Federation of 
Accountants' (IFAC) International Auditing and Assurance Standards 
Board (IAASB) is an important step forward in the development of 
INTOSAI's financial auditing guidelines. Many SAIs are involved in this 
worldwide effort, bringing both public and private sector auditors 
together on a global basis.

IFAC and the IAASB:

IFAC is the global organization for the accountancy profession. Founded 
in 1977, it has its headquarters in New York. IFAC works to protect the 
public interest by encouraging high quality practices on the part of 
the world's accountants. IFAC has 158 member organizations from 118 
countries and represents over 2.5 million professionals from private 
auditing and accounting firms, the public sector, business, industry, 
and higher education.

IAASB is IFAC's standard-setting body. As outlined in IAASB's annual 
report for 2003, its objective is to serve the public interest by 
setting--independently and under its own authority--high-quality 
auditing, assurance, quality control, and related standards.

Most of IAASB's 18 members are practicing auditors and accountants 
representing IFAC's member organizations throughout the world. Three 
are "public members," representing, for example, academia, the public 
sector, or business and industry. Currently, two of the three public 
members represent the public sector.

International Standards on Auditing (ISA) are well-established auditing 
standards developed by IAASB. They are subject to continual revision 
and update, and new ISAs are developed as necessary.

IAASB's Consultative Advisory Group (CAG) consists of representatives 
from various user groups and provides input and feedback on IAASB's 
work program, project priorities, and major technical issues. INTOSAI 
has a representative in the CAG.

Development of International Auditing Standards:

Numerous factors have influenced the development of international 
auditing standards in recent years. Several of these are outlined in 
the following sections.

Financial Scandals and the Need to Rebuild Confidence in the Accounting 
and Auditing Industry:

Numerous financial scandals in recent years have been a primary 
influence on the development of international auditing standards. The 
accounting and auditing industry has lost credibility, and concentrated 
worldwide efforts are being made to rebuild confidence in the 
profession. Auditing standards related to quality control, risk 
assessment, risk management, fraud, and corporate governance have been 
given high priority by standard-setting groups.

The PCAOB: A New and Significant Player:

As a result of the recent financial scandals, new legislation has been 
implemented in many countries, the most well known being the Sarbanes-
Oxley Act of 2002 introduced in the United States. Among other things, 
this legislation establishes the Public Company Accounting Oversight 
Board (PCAOB). The PCAOB is a private sector, nonprofit organization. 
Its purpose is to oversee the auditors of public companies in order to 
protect the interests of investors and further the public interest in 
the preparation of informative, fair, and independent audit reports. 
The PCAOB has a statutory responsibility to develop auditing standards 
to be applied in the audits of publicly listed companies in the United 
States. With the establishment of the PCAOB, the accounting and 
auditing industry is no longer able to function with the same degree of 
self-regulation it enjoyed before.

Globalization, Convergence, and the Need for Harmonized Standards:

Globalization and international convergence have also been factors 
influencing IAASB's work on updating existing--and developing new--
auditing standards. The European Union (EU) and the World Bank are 
looking for a wider use of harmonized, high-quality auditing standards. 
The EU requires companies listed on its stock exchanges to apply 
International Financial Reporting Standards developed by the 
International Accounting Standards Board. The EU has also indicated 
that it will require the use of ISAs for all audits performed in the 
EU. The United Kingdom's Auditing Practices Board plans to adopt the 
ISAs starting in 2005. Activities are taking place worldwide to 
harmonize the ISAs with national auditing standards. There is also a 
trend toward a greater harmonization of public and private sector 
auditing standards.

Contact between the Public and Private Sectors:

The public sector is already represented in several aspects of 
international audit standard-setting. For example, INTOSAI is 
represented on the IAASB and the CAG. Numerous SAIs already have well-
developed public sector auditing standards. This is typical in 
countries like the United States and the United Kingdom, where certain 
government auditing work is outsourced to private contractors and then 
reviewed by the SAI. The SAIs in these countries have contact with 
national standard setters and are often consulted in the process of 
developing national auditing standards by, for example, participating 
in roundtable discussions.

Development of INTOSAI's Auditing Standards and Guidelines:

INTOSAI's Auditing Standards Committee (ASC) has the task of developing 
INTOSAI's auditing standards. Within the ASC, the task of developing 
additional guidelines for financial audits has been delegated to the 
Working Group on Financial Audit Guidelines, which is led by the 
Swedish SAI. Its other members are the SAIs of Austria, Canada, 
Cameroon, Namibia, Norway, Tunisia, the United Kingdom, and the United 

The development of financial auditing guidelines will make up the 
fourth level in the INTOSAI hierarchy, which presently consists of the 
Lima Declaration, the Code of Ethics, and the INTOSAI Auditing 

Numerous alternatives for developing guidance at the fourth level were 
debated, and the ASC concluded that developing financial auditing 
guidelines for the public sector by drawing upon the ISAs would be the 
most robust and effective method. The memorandum of understanding that 
has been signed by INTOSAI and IFAC is regulating their cooperation in 
this regard. The following chart illustrates the cooperative process 
guiding the two organizations.

INTOSAI/IFAC Cooperation in Developing International Audit Standards:

[See PDF for image]

[End of figure]

To coordinate the work on behalf of INTOSAI, a project secretariat has 
been established at the Swedish SAI. One of the secretariat's most 
important tasks is selecting experts from INTOSAI to participate in the 
IAASB task forces involved in developing ISAs. The experts are to 
contribute to the overall quality of the standards and provide input on 
specific issues and perspectives relevant for the public sector.

During the fall of 2003, INTOSAI's members were asked to nominate 
experts to participate in the development of the standards and 
guidelines. A total of 84 experts were nominated from 43 different 
countries. One INTOSAI expert is to participate on each IAASB task 
force, assisted by two to three INTOSAI back-office experts. To the 
extent possible, the experts should represent different geographic 
areas and different organizational models (both auditor general and 
court models).

Based on their knowledge and experience, the experts will represent the 
broadly based interests of INTOSAI rather than their own SAIs. In 
addition to working on the IAASB task forces, the experts will 
consider, and if necessary propose, additional guidelines for practice 
notes. Practice notes will elaborate on specific public sector 
perspectives, in addition to what is included in the ISA, and provide 
guidance as to how the standard should be applied in the public sector. 
An INTOSAI financial auditing guideline will comprise both an ISA and a 
practice note.

There may also be topics that are highly relevant for public sector 
auditors but not for private sector auditors, such as compliance 
audits. Since there will be no applicable ISA in such areas, INTOSAI 
will need to develop its own guidance. At the INTOSAI Congress in 
Budapest, formal establishment of a separate INTOSAI working group, led 
by the Norwegian SAI, to address these areas will be proposed for 

Recent INTOSAI Activities:

As reported in the April 2004 Journal, elected INTOSAI experts, as well 
as representatives from IFAC, attended a meeting in Stockholm in 
January 2004 hosted by the Swedish project secretariat. The group 
discussed the cooperation between INTOSAI and IFAC, the general 
framework for the work to be performed, the process for developing the 
ISAs and practice notes, and the role of the INTOSAI experts. The 
Stockholm meeting was an excellent opportunity for the various parties 
to meet and discuss progress to date and future plans.

In March 2004, the Cameroonian SAI hosted a meeting of the Working 
Group on Financial Audit Guidelines. Representatives from IFAC and one 
of the INTOSAI experts involved in an IAASB task force also 
participated in the meeting. The purpose of the meeting was to provide 
a status report on work carried out to date; agree on short-and long-
term plans, priorities, and ambitions; and discuss cooperation and 
contact with IFAC, the World Bank, and the INTOSAI community and other 
challenges associated with the work. The group also received feedback 
based on INTOSAI's participation in the IAASB task force working on ISA 
230 - Documentation. At a June 2004 meeting in Oslo, the Auditor 
General of Norway hosted a meeting of INTOSAI representatives to 
discuss the terms of reference for developing financial auditing 
guidelines for compliance audit.

Participants at the meeting in Cameroon also discussed some of the 
fundamental differences between the public and private sectors and the 
related challenges in developing financial auditing guidelines based on 
the ISAs. An example of this is the need for a common language in the 
standards that is meaningful to both public and private sector 
auditors. Another example is the public sector auditor's extended 
mandate, which includes elements of compliance as well as financial 
audit. At the meeting, participants agreed to an interim way forward in 
regard to these matters.

[See PDF for image]

Photo caption: INTOSAI representatives from Norway, Sweden, and the 
United Kingdom at the June 2004 meeting in Oslo.

[End of figure]


The cooperation between INTOSAI's ASC and IFAC's IAASB in developing 
international audit standards and guidelines provides many advantages. 
It is an excellent opportunity for INTOSAI to participate in a highly 
developed and professional international standard-setting process. 
Identifying and discussing issues from various systems and points of 
view can also enhance the quality of the standards and guidelines. This 
will be important in helping to establish robust best practice 
standards and guidelines that will benefit both the public and private 

The knowledge built by participating in the IAASB task forces will be 
advantageous for INTOSAI in developing practice notes to provide 
specific guidance for public sector auditors. This working process will 
help INTOSAI develop the fourth level of guidance in a quicker and more 
efficient way than if it had carried out the work on its own. This is 
an advantage for the entire INTOSAI community--especially for countries 
that today do not have their own standards or guidelines.

Challenges still remain for INTOSAI, however. There is a continuing 
need for qualified experts to participate in IAASB task forces. Another 
challenge is the need for continued funding to ensure diversity related 
to INTOSAI's participation in the work. Translating the guidance into 
INTOSAI's five official languages will give rise to both linguistic and 
financial challenges in the future.

The cooperation agreement also has advantages for IFAC. IAASB's 
Chairman, John Kellas, sums up the cooperation as follows:

IAASB is delighted that we have an active working relationship with 
INTOSAI. We believe that the potential for a common core of auditing 
standards used by both Supreme Auditors and the private sector is a 
step towards common understanding and mutual acceptance of audit 
reports by the two sectors in a global context. IAASB has been very 
appreciative of the participation of INTOSAI members on our task forces 
and we hope the interaction will prove beneficial to all parties as new 
standards are completed and issued.

For an update on the work on specific ISAs and practice notes, see 
"Inside INTOSAI" on p. 36.

[End of article]

VIII ARABOSAI General Assembly Held in Jordan:

By Helen H. Hsing, U. S. Government Accountability Office:

[See PDF for image]

Photo caption: Senior ARABOSAI officials convene a session at the Amman 
General Assembly.

[End of figure]

From June 7-10, 2004, delegates from SAIs throughout the Middle East 
met in Amman, Jordan, to attend the 8th General Assembly of the Arab 
Organization of Supreme Audit Institutions (ARABOSAI), hosted by the 
Audit Bureau of Jordan. Participating SAIs were Algeria, Bahrain, 
Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, 
Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates, and 
Yemen. Guests and observers included Mr. Tawfeeq Bin Ibrahim Tawfeeq, 
former President of the General Auditing Bureau of the Kingdom of Saudi 
Arabia; Mr. David M. Walker, the Comptroller General of the United 
States; and staff of the General Secretariat of the Cooperation Council 
of the Arab Gulf States, the INTOSAI General Secretariat, the INTOSAI 
Development Initiative, and this Journal.

Opening Ceremony:

The opening ceremony took place in the Royal Hotel in Amman. Mr. Salem 
Al Khazaleh, President of the Audit Bureau of Jordan and the incoming 
President of ARABOSAI, gave a heartfelt welcome to all participants. 
The meeting was held under the auspices of His Majesty King Abdullah Il 
Ibin al-Hussein, who was represented by Prince Faysal Ibin al-Hussein. 
Also present were the Prime Minister, ministers and other senior 
Jordanian officials, and a number of ambassadors to Jordan from the 
Arab states.

Mr. Al Khazaleh opened the plenary by addressing many of the challenges 
to auditing public funds in the context of international changes. He 
called upon the Arab SAIs to further the Arab "joint action system," 
particularly with regard to disseminating technical knowledge and 
sharing experiences.

Dr. Ahmed El Midaoui, first president of the Supreme Board of 
Accounting in the Kingdom of Morocco and the outgoing president of the 
ARABOSAI Governing Board, reminded the participants of ARABOSAI's 
objectives and praised the organization's continuous efforts to pursue 
those objectives, which have enabled it to hold a prestigious position 
within INTOSAI and the regional SAI organizations. Ms. Faiza Kefi, 
First President of the Court of Accounts of the Republic of Tunisia and 
Secretary General of ARABOSAI, also expressed her satisfaction with the 
achievements of ARABOSAI, citing especially its seriousness and 
perseverance in the implementation of training programs and other 

Technical Theme Presentations:

The 8th ARABOSAI General Assembly was organized around two technical 
themes. Plenary addresses introduced each theme and were followed by 
delegate debates on the professional and technical issues discussed in 
the principal papers and other presentations. Conclusions and 
recommendations were developed and approved for each theme.

Theme 1: Modernizing SAI Auditing Methods:

The SAI of Kuwait served as president of the session while the SAI of 
Jordan served as the coordinator. Saudi Arabia prepared the 
comprehensive theme paper, and 11 other SAIs--Jordan, Tunisia, United 
Arab Emirates, Sudan, Iraq, Qatar, Kuwait, Lebanon, Egypt, Morocco, and 
Mauritania--also presented papers on the topic.

Conclusions and recommendations on this theme included the following.

* SAIs should be provided with complete management and financial 

* SAIs should be provided with financial and moral incentives so that 
they can (1) attract and retain staff who possess the necessary 
qualifications, competence, and specialized expertise to conduct audit 
work and (2) encourage others to participate in audit work.

* SAIs should pay attention to planning, executing, and setting 
standards for audit work as well as conducting the studies and research 
necessary to define and address the impediments to audit work.

* SAIs should be interested in the outputs of universities and 
specialized professional institutions in the auditing and accounting 
fields with a view to linking auditing and accounting education more 
closely with advances in the field of information technology.

* An ARABOSAI work team, composed of member SAIs, should be established 
to keep up with innovations in auditing, share knowledge with member 
SAIs, encourage staff secondments in order to be better acquainted with 
other SAIs, and define priorities.

* Member SAIs should modernize the systems and instructions governing 
the financial conduct of their respective governments and their own 

* Member SAIs should apply the comprehensive auditing approach used by 
more advanced SAIs to replace the traditional auditing approach.

Theme 2: Relations and Complementary Functions of SAIs and Internal 
Audit Entities:

Egypt served as president of the discussion session while Jordan served 
as coordinator. Iraq prepared the main study, and nine other countries-
-Jordan, Saudi Arabia, Sudan, Qatar, Kuwait, Lebanon, Egypt, 
Mauritania, and Yemen--submitted papers on this theme.

Conclusions and recommendations on this theme included the following.

* The laws governing SAIs should have language that compels the 
agencies being audited to implement recommendations put forth by audit 

* SAIs should show appropriate concern for internal audit entities 
given the importance of the latter and the role they play in 
implementing auditing tasks and protecting public funds. If internal 
audit entities do not exist, SAIs should strongly encourage and support 
their creation or the integration of financial audit entities into the 
management structures of executive agencies.

* Internal audit entities should have an appropriate level of authority 
and independence in the executive agencies within which they operate. 
Executive laws and regulations should guarantee this authority and 
independence so that these bodies can carry out their tasks and achieve 
their objectives.

* In those cases where SAIs rely on the results of work performed by 
internal audit entities within the executive agencies, the SAIs must 
first check the audit scope and ensure that these internal audit 
entities are sufficiently independent and competent and that the work 
can be relied upon.

* SAIs should be concerned about corrective actions and reform as well 
as compliance.

* SAIs should be legislatively authorized to carry out comprehensive 
performance auditing. SAIs should also be concerned with preparing and 
developing standards to establish the appropriate relationship between 
internal auditing and financial auditing.

* Joint meetings should be held between SAIs and internal audit 
institutions--possibly with the participation of legislative and 
executive entities--to discuss economic and management problems and 
find appropriate solutions to them.

* SAIs should provide assistance and advice to executive agencies to 
complement their institutional development, including organizational 
structures, laws, and regulations, while at the same time ensuring that 
SAIs do not become executive bodies.

After the discussion of this theme and its recommendations, the General 
Assembly resolved that member SAIs should have the freedom to adopt 
those recommendations that suit their particular situation.

ARABOSAI Business:

Dr. Ahmed El Midaoui, first president of the SAI of Morocco and 
president of the Governing Board, presented the board reports on 
ARABOSAI's activities and financial condition as well as the actions 
taken to implement its organizational plan of action.

The General Assembly approved the following during its meeting:

* scientific and training workshops for 2005 through 2007;

* the Governing Board's recommendation that the Training and Scientific 
Research Committee present a brief description of each workshop theme;

* three topics for the 8th scientific research competition: the role of 
SAIs in the accountability of public funds, SAIs and the application of 
electronic governance, and environmental auditing;

* continued commitment to translating INTOSAI's International Journal 
of Government Auditing and encouragement of SAIs to translate guidance 
issued by SAIs in advanced countries;

* the draft ARABOSAI financial program for the years 2005-2007 within 
specified limits; and:

* three technical themes for the 9th General Assembly meeting: the role 
of SAIs in the administrative development of states; the contribution 
of auditing standards and procedural guides to enhancing the quality of 
audit work; and the development of auditing standards in light of 
electronic data systems.

During the General Assembly, Dr. Osama Jaffer Faqeeh, president of the 
SAI of Saudi Arabia and a member of the INTOSAI Governing Board and the 
Strategic Planning Committee, and Mr. David Walker, Comptroller General 
of the United States and Chairman of the INTOSAI Strategic Planning 
Committee, discussed the draft INTOSAI Strategic Plan that will be 
presented for approval at the Budapest Congress in October 2004 and 
responded to delegates' questions. Mr. Walker provided information on 
the extensive efforts that the Strategic Planning Committee has made to 
respond to member SAIs' comments and address any concerns. He also 
shared with delegates a presentation on the evolving role of SAIs, the 
changing nature of their work, and new methods and trends.

Election of the Governing Board and Audit Committee Members:

During the general business session on the last day of the assembly, a 
new Governing Board for the ARABOSAI was elected. In accordance with 
the provisions of the ARABOSAI statutes, Dr. Ahmed El Midaoui announced 
the transfer of the General Assembly presidency to the Audit Bureau of 
Jordan. Morocco, which hosted the previous ARABOSAI Assembly, is the 
first vice president. Yemen, which will host the next ARABOSAI Assembly 
in 2007, is the second vice president. Dr. Abdullah Abdullah Al-Sanafi 
of Yemen extended an invitation to the delegations to participate in 
the 9th General Assembly in the city of Sana'a. The delegates elected 
four member SAIs--Algeria, United Arab Emirates, Kuwait, and Egypt--to 
the Governing Board. They join the current members of the Governing 
Board--the Secretary General of ARABOSAI and the SAIs of Saudi Arabia, 
Bahrain, Libya, and Lebanon.

The General Assembly also resolved to set up a financial audit 
committee to audit ARABOSAI accounts for the years 2004, 2005, and 
2006. The committee is composed of the SAIs of Sudan, Qatar, and 

Other Activities:

Throughout the conference, the President of the Audit Bureau of Jordan 
and his staff were gracious and hospitable hosts. Before the start of 
the General Assembly, delegates and invited guests toured the ancient 
city of Petra, a historical treasure of Jordan built over 2,000 years 
ago. On Tuesday evening, the participants were treated to an evening of 
Jordanian food and music. On Wednesday evening, delegates and guests 
enjoyed dinner at a hotel at the famous Dead Sea. On the last day of 
the conference, Mr. Salem Al Khazaleh presented delegates representing 
their SAIs with awards commemorating their attendance at the VIII 
ARABOSAI General Assembly. He also gave awards for the best articles 
presented at the conference.

For additional information, contact: ARABOSAI General Secretariat, c/o 
Ms. Faiza Kefi, First President of the Court of Accounts of the 
Republic of Tunisia, fax: ++71 76 78 68; e-mail:

Editor's note: The author wishes to acknowledge the contributions of 
Nadera El Tayyan, Audit Bureau of Jordan, to this article.

[End of article]

Audit Profile: The Office of the Auditor General of Botswana:

By Moffat W. Rakgailwane, Senior Auditor, Performance Audit Unit:

From the colonial period up to 1964, the headquarters of the audit 
office of what were known as the High Commission Territories 
(Bechuanaland Protectorate, Basutoland, and Swaziland) was based in 
Pretoria, South Africa. Each territory had a Senior Auditor. In the 
case of the Bechuanaland Protectorate, the Senior Auditor was stationed 
in Mafikeng, the capital. The post of Senior Auditor was later changed 
to Director of Audit.

The audit office of what was to become the independent country of 
Botswana was moved from Mafikeng to Gaborone in 1965 before 
independence. The office continued under a Director of Audit until 
1970, when the title of the post was changed to Auditor General (AG).

The office focused primarily on financial audits, which addressed the 
accuracy, completeness, and timeliness of financial statements. Audit 
activities were carried out manually, and there was little planning 
with regard to such issues as the audit approach or the qualifications 
of the staff needed to be engaged in the audits.

The Office of the Auditor General (OAG) of Botswana has undergone 
significant changes and improvements since that time. The improvements 
have included the introduction of an audit manual and auditing 
standards; the merger with the local audit division; and the 
introduction of the performance audit division and computers. These 
have improved the quality and timeliness of the audit work, leading to 
a more positive outlook on the part of members of the public.

Mandate, Responsibilities, and Independence of the Auditor General:

Section 124 of the Constitution of Botswana provides that there shall 
be an Auditor General and a public audit office. The AG is appointed by 
an act of Parliament, which is ratified by the President, in accordance 
with the Constitution and the Finance and Audit Act. The AG is 
empowered to examine the accounts of all ministries, departments, local 
authorities, councils, land boards, and parastatals. The Finance and 
Audit Act was amended to encompass performance auditing in addition to 
financial auditing.

The AG's responsibilities are detailed in section 29(1) of the Finance 
and Audit Act.

The AG shall satisfy him/herself that:

* all reasonable precautions have been taken to safeguard the 
collection and custody of public moneys and that the laws, 
instructions, and directions relating thereto have been duly observed;

* the disbursement of public moneys has taken place under proper 
authority and for the purposes intended by such authority;

* all reasonable precautions have been taken to safeguard the receipt, 
custody, issuance, and proper use of public stores and that the 
instructions and directions relating thereto have been duly observed; 

* adequate instructions or directions exist to guide the officers 
responsible for the collection, custody, issuance, and disbursement of 
public stores.

Vision, Values, and Ethics of the OAG:

The vision of the OAG of Botswana is to be an independent and proactive 
SAI that is responsive to the needs and expectations of the nation and 
keeps abreast of regional and global developments.

The OAG's values and ethics are as follows:

* Timeliness: Reports will be produced on time.

* Independence, Objectivity, and Impartiality: Auditors will be 
impartial in both fact and appearance when dealing with auditees. 
Therefore, conclusions and opinions will be based exclusively on 
evidence provided.

* Trust, Confidence, and Credibility: The SAI will ensure that its 
conduct and approach are above suspicion and reproach.

* Integrity: High standards of behavior, such as honesty and 
candidness, will be maintained.

* Professional Development: Auditors will adhere to professional 
auditing standards.

* Conflict of Interest: Auditors will be made aware of issues that 
could jeopardize their independence, such as personal relationships.

* Competence: Auditors will follow international auditing, accounting, 
and financial management standards.

* Political Neutrality: Actual and perceived political neutrality will 
be maintained.

Mission Statement:

The OAG's mission is to promote accountability, provide quality audit 
in the public sector, and assure the nation that public resources are 
applied to the purposes intended.

Primary Objective:

The primary objective of the OAG is to enhance the socioeconomic 
development of the nation through the promotion of sound financial 
management and proper accountability for public funds and assets.

Types of Audits Conducted:

Financial Audit: The OAG examines the financial statements and 
expresses an opinion as to whether the accounts show a true and fair 
view of the financial affairs of the entity. The OAG' s report is 
released annually for both the central government and parastatal 
government audits.

Performance Audit: Performance auditing focuses on the economy, 
efficiency, and effectiveness with which public resources are being 
handled and accounted for. The reports are issued upon completion.

Local Government Audits: These audits are conducted for the councils, 
land boards, and local authorities. The reports are issued upon 
completion within a particular financial year.

Information Technology (IT) Audits: These are primarily focused on the 
activities of the IT units within the audited entities. However, they 
are often used as a complement to the other types of audit.

Special Audits: These emanate from requests by the President, Members 
of Parliament, or the AG and warrant immediate attention.

Audit Process The OAG adheres to the following procedures when 
conducting its audits.

* An engagement letter is issued to the auditee, where applicable.

* A planning memorandum is prepared.

* The planning memorandum is approved by the Assistant Auditor General 

* An audit program is prepared.

* The audit program is approved by the AAG.

* A pre-audit meeting is conducted.

* The audit is conducted.

* A letter of management is obtained, where applicable.

* A draft management letter is prepared and discussed with the AAG.

* The draft management letter is discussed with the head of department 
at an exit meeting.

* The management letter is finalized and auditee comments are 

* The management letter is approved by the AAG.

* The management letter is issued to the auditee.

* Follow-up is carried out.


The AG, who is independent from the executive, heads the OAG. A Deputy 
Auditor General (DAG) and four Assistant Auditors General (AAGs) assist 
the AG. The DAG's main duty is to coordinate sectional activities 
through the AAGs and the Under Secretary (US). The US is the head of 

The OAG is divided into six operational departments and/or divisions/

* The Administration Division handles the OAG's administration of 
finance, planning, and accounting.

* The Central Government Division audits all government ministries, 
departments, and capital projects.

* The Performance Audit Unit conducts value-for-money audits and 
performance audits on public spending.

* The Parastatal Audit Division audits parastatal organizations.

* The Local Government Audit Division, which has four sections, audits 
local authorities, councils, and land boards.

* The Special Operations Unit is responsible for audit reports, 
legislation and auditing standards, information system administration, 
and information systems audits.


Section 124 of the Constitution and Section 29 (1) of the Finance and 
Audit Act empower the AG to report the results of OAG audits to the 
National Assembly through the Public Accounts Committee (PAC).

The PAC discusses the reports and makes recommendations for corrective 
action to the accounting or executive officers of audited 
organizations. By convention, the government must implement these 
recommendations. Thus, the reports help the government to exercise 
accountability. In this manner, the OAG plays a role in strengthening 
the democratic process and ensuring good governance.


The OAG currently has approximately 98 auditors and 41 administrative 
staff. The auditing staff is made up of officers from varying 
educational backgrounds. These include certifications from the 
Association of Chartered Certified Accountants (ACCA) or Chartered 
Institute of Management Accountants (CIMA), undergraduate and masters 
degrees, diplomas, and computer specializations.


The OAG faces challenges in a number of areas, including the following:

* the lack of skilled manpower, the shortage of computers, and limited 

* the lack of proper guidelines and procedures for staff training and 

* having only one staff person in the newly established Quality Control 

* auditing "around" but not "through" the computer; and:

* the lack of its own office building.

Future Prospects:

The OAG has a strategic plan for 2003-2009 that focuses on two key 
result areas: accountability to the public sector and organizational 
effectiveness. The SAI has set goals and objectives with regard to 
these areas as well as concrete steps on how to achieve them. 
Specifically, the OAG's goals are to achieve the following by March 31, 

* provide high quality audit service that conforms to international 
auditing standards,

* report the performance and delivery of results by the public sector,

* create an audit environment conducive to public accountability in the 

* build a human resource capacity to deliver results,

* have processes in place that service the delivery of the core 

* improve the efficiency and effectiveness of OAG operations, and:

* manage contributions from stakeholders.

For additional information, contact: OAG, fax: ++267 58 81 45; e-mail: 

[End of report]

Reports in Print:

Journal readers may be interested in the new publication called The 
World Guide 2003/2004: An Alternative Reference to the Countries of our 
Planet, which is available in English and Spanish. The guide, now in 
its fifth edition, provides profiles of 238 countries and territories. 
It also offers 25 brief essays on such topics as the depletion of 
species and natural resources, people who lack a voice and 
representation in the world community, the spreading tentacles of HIV/
AIDS, and the accelerating expansion of cities and income inequality. 
The unique publication ends with an International Organizations 
Directory offering websites, and descriptions of 50 major governments 
and financial, military, and ecological organizations. It is produced 
by the Instituto Del Tercer Mundo, Montevideo, Uruguay. The English 
language publisher is New Internationalist Publications, Oxford, United 
Kingdom. For more information on the Spanish edition, visit For information on the English edition, visit wguide03.htm.

The Board of Audit of Japan has issued its annual publication entitled 
Government Auditing Review, March 2004. This publication contains 
articles prepared by academics and the staffs of governmental 
institutions in Japan. The articles cover a wide range of topics 
related to government auditing, including finance, public accounting, 
public administration, and public accounts. The current edition 
includes articles on medical payment systems, contracting systems for 
public works, government auditing by SAIs, analyses of budget systems, 
and SAI performance measurement. Journal readers may be particularly 
interested in the article "Performance Measurements of Supreme Audit 
Institutions in 4 Countries: Leading by Example" by Nobuo Azuma, 
Director of the Study Division of the Board of Audit. This article 
tells how performance audit was introduced in Japan in 2001 but has yet 
to achieve its anticipated results. The author introduces the types of 
performance measurement used in Australia, Canada, New Zealand, and the 
United States and examines these countries' approaches to improving the 
quality of such measurements. It is published by the Study Division, 
Board of Audit of Japan, 1-105 Kandajimbo-cho, Chiyoda, Tokyo 101-8404, 
Japan; fax: +81-3-3581-8877; e-mail

The Alan Shawn Feinstein International Famine Center has published its 
report on Human Security and Livelihoods of Rural Afghans 2002-2003. 
The report documents and analyzes recent countrywide trends in the 
relationship between human security and livelihoods throughout rural 
Afghanistan. Funded by USAID, the report emphasizes the important links 
among four key aspects of human security in the livelihoods of rural 
Afghans and the prospects for peace and development in the country in 
the longer term. The four aspects of human security are: human rights 
and personal security, societal and community security, economic and 
resource security, and governance and political security. The report is 
available on the Internet at For additional 
information, contact the Feinstein International Famine Center, 
Friedman School of Nutrition Science and Policy, Tufts University, 126 
Curtis Street, Medford, MA 02155, USA; fax: +1 617 627 3428; e-mail:

ASOSAI has published its guidelines for dealing with fraud and 
corruption. During its 31st meeting in Manila, the Governing Board of 
ASOSAI established an ad hoc working group and a core member task force 
(comprising representatives from Bangladesh, India, Japan, Korea, 
Malaysia, Nepal, Pakistan, the Philippines, Thailand, and Turkey) to 
develop regional guidelines for dealing with fraud and corruption. The 
guidelines were formulated based on the results of a survey 
questionnaire on existing approaches and practices used by ASOSAI 
members. The publication identifies 30 specific audit guidelines on 
fraud and corruption along with specific auditing principles and 
standards prescribed by INTOSAI. To obtain a copy, contact the 
Commission on Audit, Republic of the Philippines, Commonwealth Avenue, 
Quezon City, Philippines; fax: +632-931-9223; e-mail:; Web site:

[End of Reports in Print]


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. 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 of 87 audit 
experts from 46 SAIs.

The development of the guidelines is based on close cooperation with 
the International Federation of Accountants' (IFAC) International 
Auditing and Assurance Standards Board (IAASB) with the aim of 
including public sector considerations in the International Standards 
on Auditing (ISA). See the article "Developing International Auditing 
Standards: Cooperation between INTOSAI and the International Federation 
of Accountants" (p. 20) for additional information on this 
collaborative effort.

Work in Progress on ISAs:

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

ISA 230 - Documentation:

Expert: Ms. Kelly Ĺnerud, Norway;

Back-office experts: Mr. John Fretwell, United States; Mr. Inge 
Danielsson, Sweden;

Final version expected in June 2005 and Practice Note due in March 

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 in March 2005 and Practice Note due in December 

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 in December 2005 and Practice Note due in 
September 2006.

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; Mr. Uwe Schreiner, 
Germany; and Ms. Goranka Kiralj, Slovenia.

ISA 580 - Management Representation:

Expert: Ms. Vijaya Moorthy, India;

Back-office experts: Mr. Martin Garrido, Chile, and Mr. Ennio 
Colasanti, Italy;

For more detailed and regularly updated information regarding this work 
or the standards, please visit the INTOSAI Auditing Standards 
Committee's Web site: or the IFAC website:

Work in Progress on Practice Notes:

ISA 240-The Auditor's Responsibility to Consider Fraud and Error in an 
Audit of Financial Statements: Mr. Björn Langerud, Norway.

ISA 500-Audit Evidence: Mr. Henrik Söderhielm, Sweden.

Appointment to the Focus Group:

As mentioned in the July 2004 issue of the Journal, a focus group has 
been created to ensure that public sector issues are considered at as 
early a stage as possible in the process of deciding which ISAs need to 
be developed or revised. This focus group is proud to welcome a new 
member, Mr. Graham Randall from the Office of the Auditor General of 
South Africa, who joins 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 National Audit Office of Sweden.

New Project Director Appointed:

We are pleased to announce that a new project director, Mr. Jonas 
Hällström, has been named to the Project Secretariat. Mr. Hällström has 
worked at the National Audit Office of Sweden since 1993 and is an 
Authorized Public Accountant and a Certified Information Systems 
Auditor (CISA). He previously worked 11 years at 

For further information, please contact the Project Secretariat or the 
Chair of the Working Group:

EUROSAI Working Group on Environmental Auditing:

For the past 5 years, the Polish Supreme Chamber of Control has served 
as the coordinator of the EUROSAI Working Group on Environmental 
Auditing (WGEA) by virtue of a resolution adopted by the 5th EUROSAI 
Congress, held in Paris in 1999. With the support of regional 
subcoordinators (the SAIs of France, Malta, Romania, Norway, the 
Netherlands, and Russia), the Chamber has undertaken a number of 
initiatives to encourage European SAIs to participate in WGEA 
activities, especially parallel international audits and WGEA seminars 
and meetings that promote the exchange of information on audit findings 
related to environmental protection.

Environmental auditing has become an important audit activity for the 
European SAIs. Each year, the EUROSAI WGEA holds environmental auditing 
seminars to exchange related information between European and non-
European SAIs. SAI representatives from other regions of the world, 
along with representatives of organizations involved in environmental 
protection, are regularly invited to participate. This year, the 
EUROSAI WGEA will hold a meeting, combined with a seminar on 
biodiversity and nature protection, in Sofia, Bulgaria, November 2-5, 
2004. In addition to members from European SAIs, representatives of all 
the INTOSAI regional working groups on environmental auditing have been 
invited (including AFROSAI, ARABOSAI, ASOSAI, OLACEFS, SPASAI, and the 
WGEA Chair-Canada) to present findings from environmental audits 
completed in different regions of the world. Representatives of the 
Secretariat for the Convention on Biodiversity Protection have also 
been invited to participate in this year's seminar.

The EUROSAI WGEA's recommended auditing priorities, listed in its 
strategy, are:

* protection of biodiversity and nature, with a special focus on 
endangered species;

* waste management, with a special focus on radioactive waste;

* protection of the atmosphere, with a special focus on cross-border 
pollution; and:

* protection of water, with a special focus on pollution generated by 

Experiences resulting from already completed environmental audits make 
the EUROSAI WGEA's activities an important source of information on the 
observance of provisions of international environmental agreements and 
conventions ratified by particular countries. This information is 
presented both at meetings of WGEA members and on the EUROSAI WGEA 
Internet page. It constitutes an important contribution to activities 
designed to improve the state of the natural environment and promote 
sustainable development.

For additional information, contact: EUROSAI WGEA, e-mail: eurosai-; Web site:



IDI Update keeps you informed of developments in the work and programs 
of the INTOSAI Development Initiative. To find out more about IDI and 
to keep up to date between editions of the Journal, visit the IDI Web 
site: [Hyperlink,]

SPASAI Workshop on International Accounting Standards:

During August and September 2004, SPASAI held a regional workshop in 
Fiji on international accounting standards. The workshop--developed for 
senior and middle managers in SAIs and funded by IDI--was designed to 
familiarize participants with International Accounting Standards (IAS) 
and International Public Sector Accounting Standards (IPSAS). It also 
compared the application of these standards in the private and public 

Increasing the Pools of Regional Training Specialists:

Apart from EUROSAI, where Phase 1 ended successfully in 2003 and Phase 
2 is currently in progress, IDI has completed its Long Term Regional 
Training Program (LTRTP) in all regional working groups. One of the 
LTRTP's principal developments is the creation of a pool of regional 
training specialists. In two regions, ARABOSAI and ASOSAI, a second 
group of these specialists was trained during 2002-2003.

IDI has confirmed plans with OLACEFS and CREFIAF (the Regional 
Organization for the Strengthening of SAIs of Francophone Sub-Saharan 
Africa) to develop a second pool of training specialists in each region 
during 2004-2005. In both cases, a Participant Orientation and Skills 
Assessment Workshop (POSAW) will be held to select the most appropriate 
candidates from each participating SAI. The use of the POSAW model for 
participant selection has become an established practice since it was 
used successfully during the preliminary stages of EUROSAI Phase 2. 
Further reports on these programs will appear in future editions of IDI 

Environmental Auditing in OLACEFS:

OLACEFS has begun developing a 2-week environmental auditing workshop. 
Using translated course materials from the workshop jointly developed 
by IDI and the INTOSAI Working Group on Environmental Auditing during 
2002-2004, training specialists and subject matter experts from OLACEFS 
met for a redesign meeting in Brazil in September 2004, where case 
studies and exercises based on regional environmental priorities and 
scenarios were incorporated into the course. The first delivery of the 
workshop is scheduled for November-December 2004 in Colombia, with a 
second delivery planned for the first half of 2005.

ASOSAI Prepares for Its First Public Debt Workshop:

IDI recently funded a design meeting, the first stage leading to the 
delivery of an ASOSAI public debt workshop. The meeting, which was 
hosted in Beijing by the SAI of China, brought together eight ASOSAI 
training specialists and a subject matter expert from the U.S. 
Government Accountability Office (GAO). To give the training 
specialists a firm grounding in the subject, public debt experts from 
the Asian Development Bank and Moody's Investor Services also 

The project has links to two other IDI projects. The design work was 
based on an initial 2-day design intervention carried out during the 
ASOSAI Regional Symposium in Thailand during March 2004. Also, the same 
GAO subject matter expert participated in this project as in the 
earlier OLACEFS public debt program, providing continuity between the 
two. The ASOSAI public debt workshop is scheduled for delivery in 
Australia in October 2004.

Symposium for Heads of Training in ARABOSAI:

IDI will deliver a symposium on the Systematic Approach to Training 
(SAT) for heads of training in the ARABOSAI region. This event aims to 
familiarize participants with the IDI training approach to ultimately 
improve the design and delivery of local and regional training. The 
symposium will be held in Oman from December 4-8, 2004.

Contacting IDI:

If you would like to discuss any of the issues raised in this edition 
of IDI Update, contact: IDI, telephone +47 22 24 13 49; fax: +47 22 24 
10 24; e-mail:

[End of IDI Update]

INTOSAI 2004-2005 Events:

October 4-15: ASOSAI Public Debt Workshop, Australia;

October 10-16: 18TH INCOSAI, Budapest, Hungary.

November 2-5: EUROSAI Working Group on Environmental Auditing Meeting 
and Seminar on Biodiversity and Nature Protection, Sofia, Bulgaria;

November 15-19: OLACEFS Congress, Buenos Aires, Argentina;

November 16-19: CREFIAF Participant Orientation and Skills Assessment 
Workshop, Gabon.

November 22-December 3: IDI/EUROSAI Long Term Regional Training Program 
Phase 2 design meeting, Estonia;

November 29-December 10: OLACEFS Environmental Auditing Workshop, 

December 4-8: ARABOSAI Symposium on the Systematic Approach to 

January 30-February 2, 2005: 19TH Commonwealth Auditors-General 
Conference, Wellington, New Zealand;

January 31-March 18: OLACEFS Course Design and Instructional Techniques 
Workshop, Ecuador.

February 7-25: CREFIAF redesign meeting for the Course Design and 
Instructional Techniques Workshop, Burkina Faso.

April: 14TH Meeting of the INTOSAI Standing Committee on IT, Bhutan.

May 2-June 17: CREFIAF Course Design and Instructional Techniques 
Workshop, Gabon.

May 30-June 2: EUROSAI Congress, Bonn, Germany.

Editor's Note: This calendar is published in support of INTOSAI's 
communications strategy and as a way of helping INTOSAI members plan 
and coordinate schedules. Included in this regular Journal feature will 
be INTOSAI-wide events and region-wide events such as congresses, 
general assemblies, and board meetings. Because of limited space, the 
many training courses and other professional meetings offered by the 
regions cannot be included. For additional information, contact the 
Secretary General of each regional working group.

[End of INTOSAI 2004-2005 Events]

[End of Volume 31, No. 4]