Country Report of the Turkish Court of Accounts

Musa KAYRAKPrincipal Auditor, CISA27-29 August, Ankara

A problem beyond national borders Dissemination of knowledge and experience

by seminars, conferences, RPs… Joint and parallel audits: NACSs, neighbor

countries… Follow-up/audits of international conventions

Coordination between SAIs and international organizations

A database of the detected cases of corruption;

gain knowledge of successful and/or bitter experiences create a list of high risk areas and develop related

methodologies; take necessary measures in international law;

e.g.: egov.nik.gov.pl

Not possible to give one unique answer Investigation scrutinizing lifestyles, public

behaviors and relations of officials… hidden cameras to record bribe-taking…

Audit: financial records. Not easy to launch full-fledged investigations:◦ Extend of audit evidence◦ The available audit resources (budget and human

resources)

Investigative powers in SAI mandate

SAIs without investigation power◦ No need but necessary to improve preliminary

investigations unnecessary involvement of judiciary

◦ Case of the TCA SAIs with investigation power

◦ Forensic audit unit for knowledge creating and management

Not equipped with the mandate to develop anti-corruption standard for public servants as it is the case in Turkey.

Two possible ways of contribution:◦ review implementation of such standards as a

part of the examination of internal controls ◦ The by-laws and regulatory processes in the

nature of by-laws, to be prepared on financial matters consultative opinion of the TCA.

Anti-corruption standard for public servants

Responsibility rests with regulatory agencies

Case of state enterprises

Development of anti-corruption code of conduct for business communities

No regular statistics provided to the public on the content of the suspected cases of corruption

The area of public constructions such as public buildings, roads etc.

Mostly related with the crime of fraud during the fulfillment of contractual obligations.

Highest risk area of corruption

Physical observation and site visits, Risk analysis Analysis of complaints and referrals received

and Cross control of data obtained especially from

different sources.

How to detect corruption in the highest risk area

NA Anti-corruption Strategy of the TCA

to prepare the audit strategies and annual audit programs by considering the areas with high risk of fraud and corruption

Sources for RF &FI: Frequently mentioned subjects in the official reports

of criminal act written by auditors to the Presidency of the TCA,

Analysis of the inherent and control risks Main issues highlighted in the denunciation letters, Hot topics or alleged cases of corruption in the media Suggestions to be made by the auditors and Legal conflicts which involve auditees of the TCA.

Red flags for corruption & fraud indicators: How to develop?

General risk assessment methodology of the TCA certain risk criteria related to corruption ◦ Number of denunciation letters about the auditee

received by the TCA ◦ Number of alleged cases of corruption concerning

the auditee

Denunciation and/or complaint letters via e-mails, post office and a web-based application developed to implement the right for information of citizens.

Anti-corruption complaint mechanism of TCA

A dedicated web-based complaint system by the help of a robust business process and document management system◦ Automation every single step concerning the

evaluation of the complaints ◦ Producing regular or on-request management

reports◦ Analyzing the complaints and assessments of the

auditors so as to create fraud indicators and/or red flags for the future audits

◦ Better meeting the expectations of external stakeholders

◦ Complying with the legal requirements of confidentiality and security

Strengthening the complaint system of TCA

No such units at TCA Detecting corruption already embedded in

the regular audit services A preliminary review to gather sufficient

information and evidence

Investigative audit units & forensic audit units

Article 35 of the Law on the TCA ISSAIs Main standards for TCA audits ISSAI 1240 “The Auditor’s Responsibilities

Relating to Fraud in an Audit of Financial Statements”

Language barrier

Fraud auditing standards

Analysis of;◦ risks ◦ audit findings which involves a certain amount of

public loss and ◦ corrupted cases revealed during regular audits

Using IT systems in launching general risk assessments

Publication of audit reports deterrent role

Utilization of audit results

THANK YOU

Musa KAYRAKPrincipal Auditor, CISA