quality assessment of the audit activity ljubljana, 12-13 october 2009

1

Homologues Group Meeting

Slovenia, October 2009



Republika SlovenijaRepublika SlovenijaEuropean UnionEuropean Union

Ljubljana, 12-13 October 2009Ljubljana, 12-13 October 2009

QUALITY ASSESSMENT OF THE AUDIT ACTIVITY

Ljubljana, 12-13 October 2009

QUALITY ASSESSMENT OF THE AUDIT ACTIVITY


Iveta Turčanová DG Section of Audit and Control

Ministry of Finance of the Slovak Republic

Iveta Turčanová DG Section of Audit and Control

Ministry of Finance of the Slovak Republic

2







OutlineOutline1. Establishment of AA and coordinated audit units in

Slovakia2. Reasons for quality assessment3. Timing for quality assessment4. Possible ways for quality assessment5. Recommendations6. Questions for discussion

3







Establishment of AA in SlovakiaEstablishment of AA in SlovakiaMinistry of Finance = Audit Authority (acc. to national act on financial control and internal audit)Line ministries (7) + „Financial Control Authorities (3) = coordinated audit units (CAU)

Reliance on CAU is based on:1.Contracts on cooperation (MoF ↔ line ministry) ; MoF ↔ FCA [based on minister order]

i. Rights of relevant partiesii. Responsibilities of relevant partiesiii. Reporting obligationsiv. Conditions on supervision v. Declarations on independence

2. MoF - responsible for Audit Strategy and Audit Plans (coordination meetings)3.Execution of audits (need for coordination meetings)

a) Audits under the responsibility of MoF official b) CAU own auditsc) Line ministries + FCA

4.Supervision = during audits or during reporting

4







Reasons for quality assessment 1 / 2Reasons for quality assessment 1 / 2

WHY to do quality assessment?

• Assess the reliance on the other audit units:Desired result: - better and more efficient use of audit resources

- avoiding duplicity at level of the auditee

• Are the standards understood and implemented in common way? – continuous monitoring of quality for later external audits – a need to document it

• Preventive actions to assess existing risks and implement corrective actions asap

5







Reasons for quality assessment 2 / 2Reasons for quality assessment 2 / 2

• Need to check compliance with stated guidelines, rules and audit procedures

• Establishment of adequate communication with other audit units – based on it = improvements for the future may be needed

• Enough time for preparation corrective actions in case if non- compliance or breach of stated rules

6







Timing for quality assessment Timing for quality assessment

WHEN to do it?

• According to the previous „levelling“ of the audit unitsWhat influences the levels?

– results of previous assessments– results of external audits– quality of documentation– quality and effectiveness of communication with AA

• How often? – according to Audit strategy (minimum once in 2 y.)

7







Possible ways for quality assessment Possible ways for quality assessment

HOW to do it?

• Direct supervision during audit execution – Quality assessment of the audit documentation– Coordination of audit steps (incl. assessment of audit programmes)– Quality and effectiveness of communication with AA

• Assessment of feedbacks from auditees according to methodological guidelines of AA

• External assessment possible – contract with external audit company

8







ReccommendationsReccommendations

1. Assess functional independency of CAU in practice

2. Assess personnel adequacy – are the approved numbers sustained? In case of any change – Was AA informed at the time when the change occurred?

3. Assess adequate information flows (e.g. on results of external audits, modification of laws or strategy...)

4. Does AA have feedbacks from CAU? (need for cross-checking with

individuals within AA) – Was AA informed on any difficulties while executing the audits so AA could „help“ anyhow?

9







Questions for discussion = floor is open for Questions for discussion = floor is open for YOUYOU

1. Is there any motivation for CAU to increase the quality of their work?

2. Is it possible to introduce any quality indicators for the reasons of benchmarking of CAU?

3. How to retain the independence during quality assessment of CAU while strong centralised system is established?

4. Who should execute the follow - ups (audits or documentary checks)? AA? CAU?

10







Thank you for your attentionThank you for your attention

Iveta Turčanovátel. 00421 2 5958 2146fax 00421 2 5258 3146email [email protected]

quality assessment of the audit activity ljubljana, 12-13 october 2009

Documents