Enhancing Stakeholders' Confidence: Audit Integrity & Accountability

1. Enhancing the Stakeholders’ Confidence: Audit ManagementIntegrity, Accountabilityand the Tone at the Top Assoc. Prof. Dr. Recai AKYEL ThePresident of TurkishCourt Of Accounts VII. EUROSAI-OLACEFS Conference Tbilisi 17-19 September 2012

2. CONTENT • Conceptual terms:stakeholder confidence, audit management integrity, accountability, tone at the top and their relevance for SAIs • Means to quality audit • Experience of Turkish Court of Accounts

3. EnhancingtheStakeholders’ Confidence “Quality within any organization is not achieved spontaneously; but requires a specific approach led by management.” (EUROSAI Report)

4. Concepts • Stakeholders’ confidence • Audit management integrity • Accountability • Tone at the top

5. Stakeholders’ Confidence • Who are the stakeholders of an SAI? • Auditees • Citizens • Civil Society Organizations (CSOs) • Parliament • What does stakeholders’ confidence mean? • Trust of the Parliament, auditees and public, in general, to the outputs of SAI.

6. Audit management integrity • Conditions: • Qualified auditors • Code of conduct • Open and well-defined audit procedures • Adequate monitoring by management

7. Accountability The SAI should also be accountable to somebody. Accountability of the SAI reinforces its independence by giving legitimacy to its actions. (Khan, 2007: 11)

8. Tone at the top “The standard set by the organization’s leadership whereby performance is measured; the culture within which the members of the organization operate; the tone set by senior management; irrespective of management’s documented strategy and policies, it is the force that drives individual professionals; the ‘unseen hand’ that direct activities regardless of management’s proximity to the action; and a commitment to the quality of care clients receive.” (IFAC Transnational Auditors Committee, 2007: 8)

9. How to set righttone at the top • Set the strategy for meeting ethical standards and quality, communicate the strategy internally and externally. • Adopt international standards on quality control • Recruit competent and qualified staff • Review and evaluate the implementation of quality management system

10. Elements of a system of qualitycontrol • Leadership responsibilities • Relevant ethical requirements • Acceptance and continuance of client relationships • Human resources • Engagement performance • Monitoring

11. Audit Quality Strategy QualityControlSystem Monitoring TONE AT THE TOP Communication Ethicalrequirements Humanresources

12. TCA EXPERIENCE

13. Auditmanagementintegrity • Independence of TCA and auditors: • Independence for publishing audit reports • Independence on audit scope • Budgetary independence

14. Human resources and ethics • Competent and qualified auditors • 2 years of pre-vocational training and internship • On-the–job training • TCA Law requiring adoption of code of ethics

15. Quality Control System Quality Control Procedures for Audit Quality • Hot review • Teamleader • Head of Group • AuditPlanningandCoordinationGroup • Chambers • ReportEvaluation Board Coldreview -AuditPlanningandCoordinationGroup - Internal peerreview

16. AuditManagement Software

19. Accountability • The TCA Communication Strategy Document for Internal and External Communication • Annual Accountability Report • Strategic Plan for 2013-2017 • Parliament being informed by the President of the TCA at least twice a year. • Transparency reports or publicity reports Meetingwith the Speaker of the Turkish Parliament

20. Conclusion • SAIs should adhere to the principle of accountability themselves and ensure audit quality. • If SAIs manage to ensure audit quality and audit management integrity, then their contribution to good governance in public sector will be valuable and they will ensure enhancing the stakeholders’ confidence. • The management should set the right tone at the top to ensure audit quality.

21. THANK YOU