Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Presentation- The Responsibilities of SAIs in relation to Fraud and Corruption. Tirana, June 2017

136 views

Published on

Presentation made by Alastair Swarbrick, Senior Advisor at SIGMA, during the Roundtable "The Role of Supreme Audit Institutions in Combatting Fraud and Corruption"

Published in: Government & Nonprofit
  • Be the first to comment

  • Be the first to like this

Presentation- The Responsibilities of SAIs in relation to Fraud and Corruption. Tirana, June 2017

  1. 1. © OECD AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU The role of the SAIs in the fighting fraud and corruption The ISSAIs: The responsibilities of SAIs in relation to fraud and corruption Alastair Swarbrick Senior Advisor, SIGMA Tirana, Albania 14 June 2017
  2. 2. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Introduction • ISSAIs Levels 1 and 2  Founding principles  Prerequisites for the functioning of SAIs • ISSAIs Levels 3 and 4  Fundamental Auditing Principles  Auditing Guidelines ISSAIs 1240, 3000, 4000, 5700 • Summary 1
  3. 3. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU ISSAIs Levels 1 and 2 • ISSAI 1 – Purpose of audit  reveal deviations from accepted standards and violations legality (…) of financial management in order to • take corrective action in individual cases • make those accountable accept responsibility, • obtain compensation, or to take steps to prevent such breaches • ISSAI 10 – SAI independence  Broad mandate  Reporting 2
  4. 4. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU ISSAIs Levels 1 and 2 • ISSAI 12 – SAIs should  respond appropriately to the risks of financial impropriety, fraud and corruption  evaluate changing and emerging risks in the audit environment and respond to these in a timely manner,  contribute to stakeholders’ awareness of the need for transparency and accountability in the public sector • SAIs lead by example  ISSAI 12  ISSAI 20  ISSAI 30 3
  5. 5. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU ISSAI 100 • Public-sector auditing contributes to good governance  provides independent, objective and reliable information on public entities and resources  Enhances transparency, accountability, improvement and confidence in the use of public funds and assets  Supports those bodies with monitoring and corrective functions over public management  Creates incentives for change through knowledge, analysis and recommendations for improvement 4
  6. 6. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU ISSAI 100 • Auditors should  identify and assess the risks of fraud relevant to the audit objectives  make enquiries and perform procedures to identify and respond to the risks of fraud relevant to the audit objectives.  maintain an attitude of professional scepticism and be alert to the possibility of fraud throughout the audit process. 5
  7. 7. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Financial Audit - ISSAIs 200 & 1240 • The purpose of an audit of financial statements is to enhance the degree of confidence of intended users in the financial statements  Is the financial information presented according with the applicable financial reporting and regulatory framework and free from material misstatement due to fraud or error? 6
  8. 8. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Financial Audit - ISSAIs 200 & 1240 - Responsibilities • Audit Body  The primary responsibility for the prevention and detection of fraud • The auditor responsibility is to:  Identify/assess the risks of material misstatement in the financial statements due to fraud,  obtain sufficient appropriate audit evidence  respond appropriately to fraud or suspected fraud  determine whether they report the occurrence or suspicion of fraud to regulatory or law enforcement entities 7
  9. 9. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Financial Audit - ISSAIs 200 & 1240 • Objectives of financial audit often wider in public sector. May include responsibilities to report on  Non-compliance with laws and regulations  Effectiveness of internal control • General expectation that public sector auditors will report on these  Influence the consideration of risks,  Procedures  reporting on indications etc. 8
  10. 10. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Compliance audit ISSAI 400, 4000 • Objective of compliance audit to assess whether:  activities, transactions and information comply, in all material respects,  with the authorities which govern the audited entity  Not normally designed to detect fraud • The primary responsibility for the prevention and detection of fraud lies with the audited entity. 9
  11. 11. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Compliance audit ISSAI 400, 4000 • Identify and assess the risks of non-compliance • Identify and assess the risk of fraud  Consider throughout the audit process  Design and implement appropriate responses to risk  Obtain sufficient and appropriate audit evidence regarding the assessed risks • When fraud identified respond appropriately according to the SAIs mandate and the particular circumstances 10
  12. 12. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Compliance audit ISSAI 400, 4000 • Great degree of international diversity in organising and reporting on compliance audit • SAI’s compliance audit responsibilities may include specific activities related to suspected fraud and corruption • Courts of Accounts are usually mandated to communicate compliance deviations to appropriate bodies or open processes leading to judgements, identifying responsible agents and offences 11
  13. 13. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Performance Audit - ISSAI 300 & 3000 • Audit Objective  Are interventions, programmes and/or institutions performing in accordance with the principles of economy, efficiency and effectiveness and is there room for improvement • Auditors responsibility  assess the risk of fraud and examine whether there are signs of irregularities that hamper performance • Audit Topic  ISSAI 5700 – Guideline for the audit of corruption prevention in government agencies 12
  14. 14. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU Summary • Promote good governance, accountability and transparency • Specifically auditors should:  Identify and assess the risks of fraud/corruption  Perform audit procedures to respond to the identified risks  Obtain sufficient appropriate audit evidence  Remain alert to indications of fraud and corruption throughout the whole audit process  Respond appropriately to indictions or suspicions of fraud/corruption 13
  15. 15. AjointinitiativeoftheOECDandtheEuropeanUnion, principallyfinancedbytheEU • Mandate  Broader responisbilities to consider fraud and corrutpion for example • Internal control • Integrity systems, audit of corruption prevention • Whistle blowing arrangements • Investigations  Broader responsibilities to report on • Indications of fraud and corruption • Suspected instancies of fraud and corruption  Auditor Generals vs Courts of Accounts • Expectations of stakeholders • Clear about responsibilities and how discharged 14
  16. 16. 15 Initial Detection of Occupational Frauds

×