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Compliance Audit Subcommittee
Reporting 2007-2010
Work Plan 2010-2013
Copenhagen, Denmark6th of May 2010
Why Compliance Audit is important – the extended perspective
Provide guidance for audits of financial statements in the public sector, including;
concerns that public funds are used
for the intended purposes principles of sound management
are followed in the execution of the budgets
Compliance Audit Guidelines- integrated approach with Financial
Audit Guidelines
Compliance Audit guidelines developed within the same structure
Cross-references made to other relevant ISSAIs
Issues on compliance audit dealt with in the context of auditing of financial statements
Definition of Compliance Audit
Deals with the degree to which the audited entity follows rules, laws and regulation, policies, established codes, or agreed upon terms and conditions, etc.
May cover a wide range of subject matters.
The purpose is to provide assurance to intended users about the outcome of the evaluation or measurement of a subject matter against suitable criteria
Scope and nature of Compliance Audit
the mandate of the SAI determines whether the SAI carries out compliance audit activities or not
The subject matters of compliance audits are wide ranging and may vary significantly from one audit to the next
the subject matter and scope of the compliance audit may be based on
Formal criteria Less formal criteria
Scope and subject matter
Requirements in the audit mandate or relevant laws and regulations
Previous instances of non-compliance
Findings and recommendations by other auditors
Risk assessments indicating specific areas of non-compliance
Public interest or expectations
Specific areas of significant legislative focus
Requests by legislative bodies, funding agencies or donors
Compliance Audit Concept
Legislature decisionsand premises
Regularity
Propriety
Criteria
Financial transactions
Activities
Results
FinancialReports
PerformanceDisclosures
Subject Matter Information
Authorities “Executing of the Budget”
Compliance?
The Compliance Audit Guidelines - two main perspectives
ISSAI 4000 - General introduction to compliance audit
ISSAI 4100 - deals with compliance audit performed separately from the audit of financial statements, for example as a separate audit task or related to performance audit
ISSAI 4200 - deals with compliance audit related to the audit of financial statements
Written as consistent, stand-alone documents
Important issues
Resonable vs limited assurance
Regularity vs propriety
Opinon on compliance
Short form and long form reporting
Materiality
Compliance Audit Process
Docu
mentation, C
omm
unication, Quality C
ontrol
Initial conciderations
Planning the audit
Performing the audit and gather evidence
Evaluating evidence & forming Conclutions
Reporting
Work plan 2011-2013
Raising awareness, implementation and maintenance of the Guidelines for Compliance Audit will be the focus of the Compliance Audit Subcommittee in the work plan 2010-2013
The implementation and maintenance of the guidelines will focus on the development and use of the concepts in SAIs
Capacity building and cooperation with other bodies on these matters are an important element in the implementation of the Compliance Audit Guidelines
Work plan 2011-2013
CAS has organized the work ahead in three different working groups within the committee; Court of Accounts issues (see item 6 above) Awareness/implementation Maintenance of the guidelines, related to issues as:
limited vs. reasonable assurance negative assurance materiality monitoring need for application material