Cooperation on Audit Standards, Internal Auditors and Supreme Audit Insitutions

Beryl Davis, Director, Standards and Guidance, Institute of Internal Auditors and Bonnie Derby, Senior Auditor of the GAO discussed cooperation on audit standards between internal auditors and supreme audit institutions at the ICGFM Winter Conference. The presentation described INTOSAI GOV 9150 Coordination and Cooperation between SAIs and Internal Auditors in the Public Sector paper.

Ms. Derby introduced the four cornerstones of good governance: public officials; the governing body; internal auditors; and external auditors (SAIs). She concluded that the relationship between internal auditors and SAIs is both critical and beneficial to good governance and the effective use of public resources.

Ms. Derby described the evolution of audit standards, and the roles and responsibilities for internal audit and supreme audit institutions.

According to INTOSAI GOV 9100 (Guidelines for Internal Control Standards for the Public Sector), internal auditors examine and contribute to the ongoing effectiveness and efficiency of the internal control structure through their evaluations and recommendations and therefore play a significant role in effective internal control. Management often establishes an internal audit function as part of its internal control framework. In this tradition, the role of internal auditors is a critical part of an organization's internal control structure.

Ms. Derby introduced the benefits of coordination including:

• Strengthen mutual accountability


• Improved risk management


• More efficient audits

Risks of cooperation on audit standards include:

• Compromise on confidentiality


• Possible conflict of interest


• Use of different professional standards

Ms. Davis advocates the convergence of audit standards. She described the coordination and cooperation on these standards including:

• Communication of audit planning and audit strategy


• Collaborating on certain audit procedures, such as collecting audit evidence or testing data


• Communication of audit reports to each other

Ms. Davis suggested that internal and external auditors could use certain aspects of each other’s work to determine the nature, timing, and extent of audit procedures to be performed. She surveyed the audience to determine that there was not significant coordination between internal and external audit in most countries:

• 24% use each others work, 69% do not


• 18% share training programs 64% do not


• 34% share reports , 52% do not


• 37% work together on strategy, 41% do not

Ms. Davis advocated cooperation between internal and external audit throughout the entire audit lifecycle. She emphasized that assessment and communication should be documented in respective audit documents.

Derby davis coordination et coopération entre les sai et les auditeurs internes du secteur public

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Derby davis coordination and cooperation between sa is and internal auditors in the public sector

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Derby davis coordinación y cooperación entre las instituciones de auditoría suprema (sai) y los auditores internos en el sector público

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Public Financial Management in Sudan

Our next two papers consider two aspects of public sector audit. The first by Hussein Mohamed El-Nafabi considers the issue of corruption in Sudan and the important role of the Auditor General in the fight against it. The objective of this study is to address the perverse incentives for financial corruption and try to provide practical solutions. It is recognised that, as in many countries, financial corruption is deeply rooted and institutionalized and the fight against it is likely to be long and difficult. However, the paper ends with a series of recommendations to assist with this struggle.

Public Financial Management in Sudan

Independence of Supreme Audit Institutions in Sub-Saharan Africa

In the next paper, Andy Wynne considers the key issue of independence for supreme audit institutions (auditors general in English speaking countries). Models of public sector ‘external’ audit type institutions are described for English and French speaking African countries. Neither approach can claim to fully meet international standards for independence, but different approaches to the provision of audit type services are considered to be acceptable. This emphasises the need to understand existing systems before external models are adopted as part of a reform process.

Independence of Supreme Audit Institutions in Sub-Saharan Africa

The State of Budget Transparency Worldwide

We start this issue with an overview from Vivek Ramkumar on the state of global budget transparency as revealed by the International Budget Partnership’s second survey. The findings are generally said to be ‘deplorable’ across the 85 countries surveyed. Perhaps surprisingly, one of the weakest groups of performers are low-income countries that are heavily dependent on donor funding. It might have been expected that the World Bank, IMF and other donors could have wielded their influence in these countries and ensured greater openness. Other countries which are particularly poor in terms of budget transparency are those which are heavily dependent on exports of oil and gas, and countries that have weak democracies. However, things are improving and many countries have improved over the two years since the last survey.

The State of Budget Transparency Worldwide