Fostering Co-operation Among Supreme Audit Institutions and Internal Control Entities

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Fostering Co-operation Among Supreme Audit
Institutions and Internal Control Entities

• The Brazilian Federal Court of Audit Experience

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Presentation Summary

• What (and why) International Auditing Standards
  Say
• Brazilian Government Auditing Legal Framework
• Brazilian Federal Court of Audits Initiatives

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International Auditing Standards Perspective

• Government auditing as part of a global context
• July 2007 - the IIA and Intosai signed a
  memorandum of understanding stressing
• interaction between internal and external audit
• common auditing standards.

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International Auditing Standards Perspective

• IFAC and Intosai have been working together to
  build in the IAASB Standards the public sector
  perspective (Memorandum of Understanding - 2006)

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International Auditing Standards Perspective

• Lima Declaration (1977) sets out, in its Section
  3, that
• SAIs should assess internal auditor
  effectiveness
• to achieve the most appropriate division or
  assignment of tasks and co-operation.

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International Auditing Standards Perspective

• Underlying assumptions of Lima Declaration
  prescription
• primary responsibility for designing and
  maintaining internal controls lies on management
• internal auditors help management assess the
  effectiveness of internal controls
• external audit work relies and starts from the
  already existing controls of the entity
• before implementation, auditing activities should
  pass the cost-benefit analysis test (in the same
  way as control activities)

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International Auditing Standards Perspective

• Conclusion
• the intelligent use of the entity control net
  justifies, allows and even legitimates the
  external auditing activity as we know it.

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International Auditing Standards Perspective

• What does as we know it mean?
• Large number of clients
• Diversity of clients
• Use of modern audit techniques (including
  sampling).

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International Auditing Standards Perspective

• IFAC
• International Standard on Auditing 610
  Considering the Work of Internal Audit.
• International Standard on Auditing 315
  Understanding the Entity and its Environment and
  Assessing the risks of Material Misstatement.
• Intosai
• General Standards on Government Auditing, items
  2.1.11, 3.1.3 e 3.4.3.

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International Auditing Standards Perspective

• In a nutshell

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Brazilian Government Audit Legal Framework
Internal Control Entities
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Brazilian Government Audit Legal Framework

• The main and more constant link among internal
  control entities and the Brazilian Court of Audit
  is the accountability process
• Accounts rendered by the executive, legislative
  and judiciary units
• Interaction throughout the year among internal
  control entities and the SAI.

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Brazilian Court of Audit Initiatives

• Bimonthly meetings with Internal Control
  Entities
• To learn about their risk-based audit plans
• To give feedback on their audit reports
• To jointly develop audit programmes
• To share information on specific auditees
• To combine efforts in audit activities.

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Thanks
Gualter Ramalho Portella, Msc, CIA,
CGAP Tribunal de Contas da União 1ª Secretaria
de Controle Externo Secretário de Controle
Externo e-mail gualterrp_at_tcu.gov.br
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