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Working with Supreme Audit Institutions in Central Asia

Working with Supreme Audit Institutions in Central Asia. Opportunities & Challenges. FIDUCIARY FORUM MARCH 2008. SAIs in CA – Control Vs Audit. Control & Revision – Soviet legacy Ex-ante activity rather than Ex-post audit No certification role in respect of year-end financial statements

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Working with Supreme Audit Institutions in Central Asia

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  1. Working with Supreme Audit Institutions in Central Asia Opportunities & Challenges FIDUCIARY FORUM MARCH 2008

  2. SAIs in CA – Control Vs Audit • Control & Revision – Soviet legacy • Ex-ante activity rather than Ex-post audit • No certification role in respect of year-end financial statements • Emphasis on expediency and effectiveness of public spending – compliance with budget law • Responsible to the President • No scope limitation, BUT Limited independence • Inadequate legal & institutional framework

  3. Audit Requirements in Bank-financed Operations • Annual Financial Statements audited in accordance with acceptable auditing standards – ISA & INTOSAI Traditionally: • Reliance on Private Sector Auditors • Focus on Financial Audit – Fiduciary Compliance However: • Increasing emphasis on Country Systems • Reliance of public sector auditors – SAIs • Blend of Financial & Performance Audit

  4. WB- SAI Relationship Engagement with SAIs in CA: • Audit of Bank-financed Operations – Kyrgyz Health SWAp – Twinning with UK NAO • Capacity Development: • PFM Reform – Kyrgyzstan, Tajikistan • IDF Grants – Kyrgyzstan, Tajikistan, Uzbekistan • Support to legal reform – Kyrgyzstan, Tajikistan, Uzbekistan • Very limited success

  5. CA SAI Challenges SAIs in CA still face a number of challenges: • Weak institutional & legal framework • Independence – limited resources, composition & selection, tenure, reporting, scope • Capacity – Limited professional expertise/technical knowledge, access to information, mandate, adversary relations between SAI and audited objects • Impact – No public availability of findings, inappropriate focus, lack of follow up, inadequate legislative oversight

  6. Conditions for Successful SAIs(Kenneth M. Dye & Rick Stapenhurt: Pillars of Integrity Importance of SAIs in Curbing Corruption) • Supportive environment – permitted to conduct their work and their reports are used to promote accountability • Clear mandates – Auditing mandates should be anchored in rules set by legislation • Independence – reporting directly to legislature without interference from other branches of government • Adequate funding, facilities, and staff • Sharing of knowledge and experience

  7. SAI Capacity Building Strategy Three Dimensions: • Stronger support for role & performance of SAI to promote increased reliance on Country systems • Increased partnership with SAIs to promote capacity building initiatives • Progressive Reliance on audits conducted by SAIs

  8. THANK YOU FOR YOUR ATTENTION

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