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Enhancing the Stakeholders’ Confidence: Audit Management Integrity, Accountability and the Tone at the Top Assoc. Prof. Dr. Recai AKYEL The President of Turkish Court Of Accounts VII. EUROSAI-OLACEFS Conference Tbilisi 17-19 September 2012
CONTENT Conceptual terms: stakeholder confidence, audit management integrity, accountability, tone at the top and their relevance for SAIs Means to quality audit Experience of Turkish Court of Accounts 2
Enhancing the Stakeholders’ Confidence “Quality within any organization is not achieved spontaneously; but requires a specific approach led by management.” (EUROSAI Report) 3
Concepts Stakeholders’ confidence Audit management integrity Accountability Tone at the top 4
Stakeholders’ Confidence Who are the stakeholders of an SAI? -Auditees -Citizens -Civil Society Organizations (CSOs) -Parliament What does stakeholders’ confidence mean? Trust of the Parliament, auditees and public, in general, to the outputs of SAI. 5
Audit management integrity Conditions: -Qualified auditors -Code of conduct -Open and well-defined audit procedures -Adequate monitoring by management 6
Accountability The SAI should also be accountable to somebody. Accountability of the SAI reinforces its independence by giving legitimacy to its actions. (Khan, 2007: 11) 7
Tone at the top “The standard set by the organization’s leadership whereby performance is measured; the culture within which the members of the organization operate; the tone set by senior management; irrespective of management’s documented strategy and policies, it is the force that drives individual professionals; the ‘unseen hand’ that direct activities regardless of management’s proximity to the action; and a commitment to the quality of care clients receive.” (IFAC Transnational Auditors Committee, 2007: 8) 8
How to set right tone at the top Set the strategy for meeting ethical standards and quality, communicate the strategy internally and externally. Adopt international standards on quality control Recruit competent and qualified staff Review and evaluate the implementation of quality management system 9
Elements of a system of quality control -Leadership responsibilities -Relevant ethical requirements -Acceptance and continuance of client relationships -Human resources -Engagement performance -Monitoring 10
Audit Quality 11 TONE AT THE TOP Strategy Quality Control System Communication Human resources Ethical requirements Monitoring
TCA EXPERIENCE 12
Audit management integrity Independence of TCA and auditors: Independence for publishing audit reports Independence on audit scope Budgetary independence 13
Human resources and ethics Competent and qualified auditors 2 years of pre-vocational training and internship On-the–job training TCA Law requiring adoption of code of ethics 14
Quality Control System Quality Control Procedures for Audit Quality 15 Hot review -Team leader -Head of Group -Audit Planning and Coordination Group -Chambers -Report Evaluation Board Cold review -Audit Planning and Coordination Group - Internal peer review
Audit Management Software 16
Accountability 19 Meeting with the Speaker of the Turkish Parliament The TCA Communication Strategy Document for Internal and External Communication Annual Accountability Report Strategic Plan for 2013-2017 Parliament being informed by the President of the TCA at least twice a year. Transparency reports or publicity reports
Conclusion SAIs should adhere to the principle of accountability themselves and ensure audit quality. If SAIs manage to ensure audit quality and audit management integrity, then their contribution to good governance in public sector will be valuable and they will ensure enhancing the stakeholders’ confidence. The management should set the right tone at the top to ensure audit quality. 20
THANK YOU 21
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