IDI ISSAI Implementation Initiative – 3i Programme Ines Metsalu Head of Financial Audit Department National Audit Office of Estonia

Agenda Objectives for 3i Programme Product Development Meeting for iCAT in Oslo iCAT and other outcomes of the first stage Envisaged activities for Discussion points for FAS

Objectives for 3i Programme To assess needs at regional and SAI level regarding ISSAI implementation at level 2 and level 4(financial, compliance and performance audit) of the ISSAI framework. To create capacity for implementation of ISSAIs in AFROSAI- E, ASOSAI, CAROSAI, PASAI and EUROSAI. To facilitate ISSAI implementation rollout (financial, compliance and performance audit) at regional and SAI level for developing countries of English speaking regions. To provide a web based knowledge sharing forum for 3i programme and products.

Steps in implementation of 3i programme Activities in 2012 and beginning of 2013: –Development of the product iCAT in July 2012; –ISSAI certification programme for ISSAI facilitators delivered through UNITAR e-learning platform in October-November 2012; –Management workshops in all regions in Envisaged activities for 2013 and onwards: –Development for Audit Manuals and Model Audit Files; –E-course on financial, compliance, performance audit; –ISSAI compliance assessment in SAI-s; –Facilitate ISSAI implementation at SAI Level.

Roles and responsibilities of FAS Draft of Cooperation Agreement between FAS and IDI: –Participate in the planning of the programme; –Provide contents and subject matter expertise for development and delivery of certification programme for ISSAI Facilitators – Financial Audit; –Provide contents and subject matter expertise for development of audit manual, model audit file and iCAT for financial audit; –Provide subject matter expertise for design and delivery of 3i Management Workshops, iCAT and ISSAI roll out at SAI level. Cooperation agreement vs practice in Oslo

Product Development Meeting for iCAT in Oslo Expected outcome in Oslo –iCAT for level 2 and level 4 ISSAIs; –E-learning and certification programme for seven weeks: Pre course test Core Text introducing financial audit Exercises, case studies etc and suggested solutions Discussion Forum – topics, issues, questions Evaluation Further Reading Links Glossary of key terms Interviews Video

Product Development Meeting for iCAT in Oslo (2) Three weeks Altogether 22 participants including supportive staff of IDI Group of six people worked on financial audit: –Margaret Te Paeru-a-te Ara Numanga from SAI of Cook Islands; –Carolyn Dawn Lewis Watson from SAI of Jamaica; –Luz Loreto Tolentino from SAI of Philippines; –Josephine Mukomba from AFROSAI-E; –Khalid Hamid from SAI of United Arab Emirates; –Ines Metsalu from SAI of Estonia.

Outcomes from product development - iCAT Expectation of IDI: iCAT as compliance assessment tool must reflect ALL requirements of corresponding guideline. Decided in the financial audit working group: –All ISA requirements are included: Easy to identify requirements –Some guidance from of Practice Notes are included; –To make it as user-friendly as possible: Institutional level vs audit level; Pre engagement, planning, fieldwork, reporting; Reference to guidance (PN-s and ISA application paragraphs); How to comply?

An example from iCAT

Outcomes from product development: iCAT (2) Do we add value? –Should iCAT be a quality assurance checklist or help the implementation process? Comment from FAS Secretariat –If iCAT where supposed to be a tool to measure the possibilities to implement the ISSAIs in SAIs environment and to identify areas where they don't have a possibility to comply listing all the requirements of the ISAs is not the right approach. Possible solution –Second set of iCAT where 125 “important” requirements were identified Requirements that determine the audit process; Items which are fundamental to the day to day operations of the audit; Requirements which if satisfied will substantially embrace other requirements.

Example of iCAT

Outcome of product development - E- learning course for iCAT facilitators Objective: train the facilitators to carry on the iCAT assessment –60 participants based on a pre-test have been selected Working group prepared E-course on financial audit includes following modules: –Week 1 – Introductory Module; –Week 2 – Common Module on Level 2; –Week 3 – FA pre engagement; –Week 4 – FA planning; –Week 5 – FA conducting fieldwork; –Week 6 – FA audit conclusion and reporting; –Week 7 - Common Module on Reporting iCAT results.

Outcome of product development: E- learning course for iCAT facilitators (2) For preparing the e- course the working group decided: –Core-text: to highlight the main concepts of standards, not explaining each standard, for each module 10 pages; –Exercises and discussion forums: getting familiar with iCAT; –Reading materials: ISSAI General Auditing Guidelines on Financial Audit; IFAC guidance into IFAC Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1 – Core Concepts; IFAC guidance IFAC guide for Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities Volume 2—Practical Guidance; Quality assurance manual of CAROSAI; AFROSAI-E model audit file; The International Public Sector Accounting Standards (IPSAS). FAS is expected to provide a mentor for e-course.

Activities for 2013 Management workshops in five regions –Target: senior management of SAIs to create awareness of ISSAIs and introduce iCAT. FAS participation at seminars is expected Pilot run of iCAT in selected SAIs –IDI is looking for volunteers among SAI-s Next product development in 3i Programme in summer 2013 –Development for Audit Manuals and Model Audit Files FAS participation is expected

Discussion points for FAS How to start with ISSAI implementation process? – Could the iCAT with critical requirements be a way forward? How to support SAI-s with limited resources? How to deal with issues in PN-s that seem to need clarifications? –The issues the working group identified were addressed in a letter to FAS How to deal with practice of SAIs without no clear distinction between financial audit and compliance audit? The role and responsibilities of FAS –Role of the expert and quality of products