Compliance Audit Subcommittee

Reporting 2007-2010

Work Plan 2010-2013

Copenhagen, Denmark6th of May 2010

1969 - a year to remember

40 years later – also a year to remember

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

Court of Accounts issues

2009 – a year to remember

Transparency

Accountability

Stewardship

Good governance

Compliance Audit

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