INTOSAI Compliance Audit Guidelines (ISSAI 4000-4200)

1. INTOSAI Compliance Audit Guidelines(ISSAI 4000-4200) Presentation by (name and tittle) Venue and date

2. Content INTOSAI and ISSAI framework 1 4 Implementation The Professional Standards Committee (PSC) and the Compliance Audit Subcommittee (CAS) 2 Compliance Audit ISSAI 4000-4200 3

3. INTOSAI INCOSAI Regional Working Groups Governing Board Secretary General Finance and Administration Committee Knowledge Sharing Committee Professional Standards Committee Capacity Building Committee IDI Performance Audit Subcommittee International Journal of Government Auditing Financial Audit Subcommittee Compliance Audit Subcommittee

4. The South Africa Declaration XX INCOSAI (2010) resolves to call upon its members and other interested parties to: • Use the ISSAI framework as a common frame of reference for public sector auditing; • Measure their own performance and auditing guidance against the ISSAIs; • Implement the ISSAIs in accordance with their mandate and national legislation and regulations; • Raise the awareness of the ISSAIs and INTOSAI GOVs globally, regionally and at the national level; • Share experience, good practice and challenges in implementing the ISSAIs and INTOSAI GOVs with those responsible for developing and revising the ISSAIs and INTOSAI GOVs

5. The Purpose and Authority of the ISSAIs • provides an Institutionalised Framework for SAIsto: • promote development and transfer of knowledge • improve public sector auditing worldwide • enhance the professional capacities, standing and influence of its members in their respective countries • Two sets of professional standards: • ISSAIs - the International Standards of Supreme Audit Institutions • INTOSAI Gov - the Guidance for Good Governance

6. ISSAI Framework

7. ISSAIs add value to the work of SAIs Adherence to the ISSAIs • Promotes transparency in the public sector and addsCredibility to our work as auditors • Improves the effectiveness and efficiency of the work of the SAI and provide the basis for highQualityaudits • Increases the perceived level of Professionalism of the SAI

8. Content INTOSAI and ISSAI framework 1 4 Implementation The Professional Standards Committee (PSC) and the Compliance Audit Subcommittee (CAS) 2 Compliance Audit ISSAI 4000-4200 3

9. Professional Standards Committee(PSC) Objectives Promote strong, independent and multidisciplinary SAIs by: • Encoururaging SAIs to lead by example • Contributing to the development and adoption of appropriate and effective professional standards • Partners The PSC is working together with other international, recognized standard-setting bodies: • The International Federation of Accountants (IFAC) • The Institute of Internal Auditors (IIA)

10. Compliance Audit Subcommittee

11. Compliance Audit Subcommittee (CAS) Objective Develop high quality, globally accepted guidelines for Compliance Audit in the public sector Strategy The objective will be reached by cooperation, participation and commitment by all committee members and the INTOSAI community, and by cooperation with other standard setting bodies.

12. Content INTOSAI and ISSAI framework 1 4 Implementation The Professional Standards Committee (PSC) and the Compliance Audit Subcommittee (CAS) 2 Compliance Audit ISSAI 4000-4200 3

13. Three Audit types Performance audit Economy Efficiency Effectiveness Financial audit The reliability of financial reporting Compliance audit Compliance of a subject matter with criteria

14. Compliance Audit – bridging the gap

15. Compliance Audit The independent asessment of whether a particular subject matter is in compliance applicable authorities identified as criteria.

16. 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 statementsWritten as consistent, stand-alone documents

17. Compliance audit:the extended perspective • Origins of cash flow in the public sector are the decisions and premises of the legislature • Compliance audit provides guidance for compliance audit related to the audit 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

18. 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 the audit of financial statements

19. Compliance Audit Guidelines:Compliance Audit performed separately from the audit of financial statements

20. Caracteristics of Compliance Audit Compliance Audit Transparency Accountability Stewardship Good governance

21. Compliance Audit – The extended perspective

22. The specific constitutional arrangemement of the SAI AUTHORITIES AUTHORITIES AUTHORITIES Compliance Audit

23. The threeparties of an audit THE LEGISLATURE THE SAI THE EXECUTIVE

24. Extension in terms ofAUDIT PRINCIPLES

25. Extension in terms ofAUDIT APPROACH

26. Extension in terms ofReporting formats • Long form reporting • Short form reporting • Findings, conclusions, opinions

27. Variations of Compliance Audit SCOPE & SUBJECT MATTER AUDIT APPROACH AUDIT PRINCIPLES REPORTING FORMATS

28. Compliance Audit Process Initial conciderations Planning the audit Performing the audit and gather evidence Documentation, Communication, Quality Control Evaluating evidence & forming Conclutions Reporting

29. Court of Accounts issues

30. Summing up • Compliance audit is the missing link between financial audit and performance audit. • Compliance audit profits from structure and continuity of financial audit, and the political relevance and methodologically diversity of performance audit. • Compliance audit adds power and relevance to the annual audit report. • Compliance audit can be integrated in a variety of subject matters and audit approaches, tailored to different audit mandates and different jurisdictions.

31. Content INTOSAI and ISSAI framework 1 4 Implementation The Professional Standards Committee (PSC) and the Compliance Audit Subcommittee (CAS) 2 ISSAI 4000-4200 3

32. Adoption and implementation • It is the responsibility of all INTOSAI members to help establish the ISSAI framework as a common frame of reference for public sector auditing. • In doing so, there are two main aspects to address: • The decision of adopting the ISSAIs by the SAI; • The implementation process.

33. ISSAIs can be implemented in two ways • By developing national standards on the basis of ISSAI 400 Fundamental Principles of Compliance Auditing • By adopting the Compliance Audit Guidelines as authoritative standards

34. Sustaining the results Implementation steps Applying the standards Learning the standards Link the ISSAIs to the priority needs of SAI Awareness ( highlighting the benefits of using the ISSAIs)

35. Implementation:to improve audit quality

36. Implementation:quality in SAI core business

37. Suitable audit criteria

38. Sufficient and appropriate audit evidence

39. Assurance & confidence of users

40. ISSAIs on Compliance Audit Outlines the basic steps and requirements on how to perform the SAI core process of Compliance Audit – adjusted to the specific constitutional arrangement of the SAI.

41. Compliance Audit Compliance Audit Transparency Accountability Stewardship Good governance