Status of Revision of ISSAIs & Information on ISSAI Harmonization Project | WGPD WGPD Secretariat Annual Meeting of the Working Group on Public Debt October 22-24, 2014 Seoul, Korea

WGPD | 2 PSC Timeframe: Revision: ISSAIs Impact: ISSAIs  KSC ISSAIs Harmonization Project Relevance to KSC

WGPD | 3 PSC: ISSAIs Harmonization Project WG members: Periodic Revision Selected WG members: Revision Portugal and Mexico: Preliminary revision Permanent Review frequency at least every 5 years Finalized Concluded ISSAIs Harmonization Project

WGPD | 4 Strategy Draft versions of revised products shall be ready by June 30, Special analysis has been carried out in order to point out possible overlaps with other WGs’ products. Revised versions will be presented and discussed during the WGPD’s meeting (Korea, October 2014). ISSAIs Revision WGPD

WGPD | 5 1. Are the ISSAIs and INTOSAI GOV still useful? 2. Do they need to be updated? In what respects? 3. Do the Working Group’s ISSAIs need to be harmonized with other WGPD products? 4. Do Working Group’s ISSAIs need to be aligned with the ISSAIs ? 5. Do Working Group’s ISSAIs need to be aligned with the general ISSAI terminology? ISSAIs Revision Criteria

WGPD | 6 1.Are the ISSAIs and INTOSAI GOV still useful? Yes, definitely ISSAIs support the development of the audit work Integrate best practices Various audit institutions’ experiences & audit guidelines ISSAIs Revision Criteria

WGPD | 7 2. Do they need to be updated? In what respects? Yes … In what respects? ISSAIs Revision Criteria

WGPD | 8 Yes, some concepts and definitions have to be harmonized. For example, in ISSAI 5410, the public debt is defined operationally and the definition defers from that used in the ISSAI The latter makes additional reference to hidden liabilities; while the ISSAI 5410 does not mention them at all. 3. Do the WG’s ISSAIs need to be harmonized with other WGPD products? ISSAIs Revision Criteria

WGPD | 9 Another example is related to the risks evaluation. ISSAI 5410 makes reference only to the operational risks (even when the document considers different types of risk by mentioning monetary risks as part of the operational risk), and ISSAI 5422 mentions nine types of risks. In this regard, it is important to consider that the international financial practices acknowledge a two-type risk classification: a) financial, and b) operational. The market, credit and liquidity risks belong to the financial type, that include the risks form the volatility of interest rates and the exchange rates; on the other hand, the operational risks include the processes, the legal part and technological risks. It would be convenient to evaluate if the concepts must be harmonized with those accepted on the international financial scope. 3. Do the WG’s ISSAIs need to be harmonized with other WGPD products?

WGPD | Do they need to be harmonized with other WGPD products? An additional example: debt sustainability. ISSAI 5410 mentions that: “Debt sustainability is the degree to which a government can maintain existing programs and meet existing creditor requirements without increasing the debt burden on the economy”. ISSAI 5422 makes reference to a concept regarding to the fiscal sustainability and conceptualize it as “...whether the present value of its future revenues is greater than its expenditures, including debt service...”.

WGPD | Do they need to be aligned with the ISSAIs ? Yes. Example: ISSAI 5422 “An Exercise of Reference Terms to Carry Out Performance Audit of Public Debt” should be aligned to ISSAI 3100 “Performance Audit Guidelines: Key Principles”. ISSAIs Revision Criteria

WGPD | Do they need to be aligned with the general ISSAI terminology? Not in all cases. It all depends on the year the ISSAI has been issued, in view of the new exiting terminology Due Process, Harmonization Project, ISSAIs awareness raising initiative, INTOSAI Glossary. ISSAIs Revision Criteria

WGPD | 13 Products ISSAI 5421 “Guidance on Definition and Disclosure of Public Debt” SAI of Portugal ISSAI 5410 “Guidance for Planning and Conducting and Audit of Internal Controls of Public Debt”, SAI of the United States of America ISSAI 5430 “Fiscal Exposures: Implications for Debt Management and the Role for SAIs”, and SAI of the United States of America ISSAI 5440 “Guidance for Conducting a Public Debt Audit – The Use of Substantive Tests in Financial Audits” SAI of the United States of America ISSAI 5420 “Public Debt: Management and Fiscal Vulnerability” SAI of Mexico ISSAI 5422 “An Exercise of Reference Terms to Carry Out Performance Audit of Public Debt” SAI of Mexico ISSAIs Revision WGPD

Status of Revision of ISSAIs & Information on ISSAI Harmonization Project | WGPD WGPD Secretariat Annual Meeting of the Working Group on Public Debt October 22-24, 2014 Seoul, Korea