1. What are ISSAIs? 1

2. ISSAIs I -International S - Standards – (of) S -Supreme A -Audit I -Institutions 2

3. ISSAI- 4 levels LevelSubjectISSAI No 1: Founding PrinciplesLima Declaration1 2: Prerequisites for functioning of SAIs Independence Transparency and Accountability Ethics, Quality 10-40 3: Fundamental Auditing Principles General-, Field-, and Reporting Standards 100-400 4: Auditing GuidelinesFinancial Audit Guidelines Performance Audit Guidelines Compliance Audit Guidelines 1000-2999 3000-3999 4000-4999

4. ISSAI 200- Principles of Financial Auditing ……………When balance sheet came into use…..with what purpose or for what objective they came into use?

5. Para 3 of ISSAI 200 ‘..each of ISSAI 1200 to 1810 contain practice notes issued by INTOSAI to provide guidance on the application of International Standards on Auditing (ISAs 200 to 810)…’ What are these ISAs? They are auditing standards developed by International Auditing and Assurance Board (IAASB).

6. Accounting IASC, 1973 IASB, 2001 IAS/IFRS AuditingIAASB, 2002ISA, 2003 ISSAIsINTOSAI The Battle for Survival?

7. ISSAI ISA International Standard on Auditing Practice Note

8. ISSAIDefinitionISA ISSAI 1200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards of Auditing -2010 ISA 200 ISSAI 1210 Terms of an Engagement -Endorsed 2010ISA 210 ISSAI 1220 Quality Control for Audits of Historical Financial Information - 2007 ISA 220 ISA 220 ISSAI 1230 Audit Documentation -Endorsed 2007ISA 230

9. Why INTOSAI developed ISSAIs for Financial Audit?  Need for detailed standards and guidance  Cooperation with IFAC and IAASB  ISAs are globally accepted  Increased quality, confidence and credibility

10. ISAs – Content and Structure Introduction  Scope of the ISA  Subject matter  Effective date Objective(s) Definition Requirements Application and other explanatory material

11. PNs – Content and Structure Background  Introduction to the ISA  Content of the Practice Note Applicability of the ISA in public sector auditing Additional guidance on public sector issues

12. INTOSAI, 1953 Congress Governing Board, 18 members General Secretariat in Vienna, Austria Regional Groups Committees Working Groups

13. INTOSAI’s Goals INTOSAI Strategic Plan (2011-2016) The four key goals are: – Goal 1: Professional Standards – Goal 2: Capacity Building – Goal 3: Knowledge Sharing – Goal 4: Model International Organisation 13

14. INTOSAI INCOSAI Governing Board Secretary General Regional Working Groups Capacity Building Committee Professional Standards Committee IDI Performance Audit Subcommittee Knowledge Sharing Committee Finance and Administration Committee International Journal of Government Auditing Financial Audit Subcommittee Compliance Audit Subcommittee 14

15. XX INCOSAI, Johannesburg, 2010 …resolves to call upon its members and other interested parties to.. Use the ISSAI framework as a common frame of reference for public sector auditing; Measure their own performance and auditing guidance against the ISSAIs; Implement the ISSAIs in accordance with their mandate and national legislation and regulations; Raise the awareness of the ISSAIs and INTOSAI GOVs globally, regionally and at the national level; and Share experience, good practice and challenges in implementing the ISSAIs and INTOSAI GOVs with those responsible for developing and revising the ISSAIs and INTOSAI GOVs.

16. Professional Standards Committee (PSC) Purpose of the PSC – to promote strong, independent and multidisciplinary SAIs by encouraging SAIs to lead by example and – contributing to the development and adoption of appropriate and effective professional standards. Mandate for PSC approved by INCOSAI XX – Harmonise the present collection of ISSAIs, and thereby ensure the consistency of the ISSAI Framework. – Promote the awareness of the ISSAI Framework and pave the way for implementation of the ISSAIs and INTOSAI GOVs in SAIs. – Continue to develop and maintain the ISSAIs and INTOSAI GOVs, observing INTOSAIs principle of dual approach in the process. 16

17. Financial Reporting Framework Para 4 of ISSAI 200: determine whether an entity’s financial information is presented in accordance with the applicable financial reporting framework…….. Para 16 of ISSAI 200 auditor gives an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework. If financial statements are prepared in accordance with a financial reporting framework, auditor gives an opinion whether the financial statements are presented fairly, in all material respects, or else gives an opinion that they present a true and fair view, in accordance with that framework.

18. Accounting IFAC, 1977 PSC,1986 IPSASB AuditingISSAIs IPSAS The Battle for Survival?

19.  Accounting Standards developed IPSASB of IFAC for public sector  Two sets of IPSAS  Cash basis IPSAS  Accrual Accounting IPSAS  Accrual IPSAS are adoption of IAS/IFRS of private sector for public sector purpose  Cash basis is supposed to be intermediary stage, to be phased out, all countries should follow accrual accounting and use IPSAS. IPSAS

20. Para 18 to 26 of ISSAI 200 imposes preconditions. – The auditor should see whether financial reporting framework that is used by government and government entities to prepare its financial statements is acceptable to them. If any government does not prepare its financial statements based on IPSAS accrual, should not be acceptable to SAI of that country SAI India is supposed to tell the Government of India and State Government that if you do not prepare your annual financial statements (accounts) ‘it is not acceptable to us’

21.  Governments have been maintaining its own accounts for centuries  Accounting framework for financial reporting of government evolved over centuries  In almost all the countries the government changes/improves the accounting framework in consultation with its CAG  The accounting frameworks of governments became unacceptable to ISSAI 200 which means unacceptable to INTOSAI?

22. Options for us…..  Use ISSAI 200 as general guidelines to develop our own standards  We can ask our Government to adopt IPSAS Accrual and prepare annual financial statements accordingly so that we can use ISSAIs on Financial Auditing?  Continue with our existing Government Accounting Framework that evolved over 200 years, suggesting incremental improvements  GASAB