Internal Auditing in Government: A Global Perspective
David A. Richards, CIARichard F. Chambers CIA, CGAP, CCSAThe Institute of Internal Auditors
Agenda
Current trends in corporate internal audit
The unique nature of audit in governmentEnsuring accountability
Improving integrity
Fighting corruption
Challenges facing government auditors
Emerging Trends in Corporate Internal Audit
Visibility of and emphasis on internal audit reaching new heightsFostering compliance with new regulations and statutesRenewed focus on:
RiskControlGovernance
Increased emphasis on objectivity and independence
New ChallengesFacing Internal Auditors
Maintaining a fully staffed internal audit activity with appropriate skill sets
Reporting relationships with senior management and the board
Increased demand for control and financial focused engagements
Fostering compliance with statutory and regulatory requirements
Maintaining a risk-focused audit plan in an era of competing priorities
Providing consulting services and maintaining objectivity in fact and appearance
The Unique Nature of Government Auditing
Alignment – reporting relationships often defined by statute
Charters – more clearly defined roles and responsibilities
Access to information – typically unrestricted
Operating environment – often political
Visibility of final reports – often made public
Key responsibilities: assuring accountability; improving integrity; fighting corruption
Government Auditors:Assuring Accountability
Government operations are funded by and provided for the benefit of the citizensCitizens have the right to expect their governments to run:
EfficientlyEffectivelyFree of waste, fraud, and mismanagement
Ensuring accountability is a vital responsibility of government auditors
Government Auditors:Improving Integrity
The vast majority of government officials carry out their responsibilities with the utmost integrity
Some government officials fall short
Audit can mitigate the risk of integrity failures by:Proactively assessing and addressing high-risk areas
Promptly reporting instances of fraud to appropriate authorities for investigation
Developing and delivering appropriate training and awareness briefings within their agencies
Government Auditors:Fighting Corruption
Corruption can exist within government or on the part of contractors and others who conduct business with governmentA strong and effective audit function is a critical tool in fighting corruptionSuccess factors include an audit function that is:
Adequately resourcedIndependentTrained in fraud prevention and detectionNetworked or integrated with appropriate investigative and law enforcement agencies
Top Ten Challenges Facing All Government Audit Organizations
1. Adequate audit staffing 82%2. Adequate compensation 81%3. Ability to measure performance 73%4. Adequate technology resources 71%5. Ability to report results promptly 70%6. Ability to benchmark 68%7. Promoting effective governance 67%8. Ability to plan based on risk 65%9. Ability to contract for experts 62%10. Adequate resources for CPE’s 61%
Source: Global Audit Information Network Flash Survey
Questions?
David A. Richards and Richard F. Chambers
The Institute of Internal Auditors