by Kirsten Astrup, INTOSAI Director of Strategic Planning
In the July issue of this Journal, I promised to write about cooperation with other standard-setting organizations—in particular, the Institute of Internal Auditors (IIA). The IIA is one of only two associate members in INTOSAI, which clearly emphasizes how important this connection is for both INTOSAI and the IIA. Although I will not discuss INTOSAI’s cooperation with the World Bank (the other INTOSAI associate member) at this time, I may do so later, as INTOSAI and the World Bank have worked side by side to fight poverty globally and help developing societies on their way to prosperity.
Before
going any further, I must tell you that I am a member of the IIA and its Advocacy
Advisory Group. Some of you may think that I am abusing my position by covering
the IIA in this column. However, I believe that working in an internal
audit environment is a valuable experience for any external auditor.
More than 20 years ago, I was working in the Norwegian audit office
when the Secretary General of the national postal service approached
me. The postal service had decided to establish an internal audit
function and needed someone to take on that task. At the time,
internal audit was not as common as it is today and, except for
the financial sector, very few Norwegian companies and institutions
had internal audit units.
I experienced a steep learning curve in my new position, but it was a pleasant time, and I returned to my previous position with a better understanding of internal audit and internal control in general.
I also learned that there were some negative attitudes towards internal audit among external auditors, and I wondered whether this was motivated by a fear that internal auditors were a threat to their position as “the auditor.” I am glad to say that this way of thinking has changed. There is space for all of us in the profession—we simply have to delineate our duties and respect each other’s work.
Standard-setting is an important element in the INTOSAI strategic plan that is reflected in goal 1: “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 [emphasis added].” Professionalism starts at home—we all have to do our best in the day-to-day audit work of our SAIs. But to do so, we need standards and guidelines on how to best carry out our work.
Henrik Otbo, Chairman of INTOSAI’s Professional Standards Committee (PSC) and Auditor General of Denmark, signed memoranda of understanding on cooperation in standard-setting with both the International Federation of Accountants (IFAC) and the IIA. As a recently selected member of the Internal Auditing Standards Governance Board, he will also be able to influence internal audit standards for the benefit of public sector auditing. In the work of standards setting, our mutual efforts in organizations like INTOSAI, IFAC, and IIA have proved to be of great value. IFAC comprises 157 members and associates in 123 countries, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce. The membership of IIA consists of 160,000 individual members from all over the globe. INTOSAI’s 188 member SAIs represent the interests of a huge number of public sector auditors.
Even though INTOSAI develops new standards as needed, cooperation with other international standard-setters is important to seek to influence and address issues of practical interest to SAIs. The area of financial audit standard-setting provides a fine example of cooperation: INTOSAI has adopted a dual approach that complements IFAC standards with a practice note developed by INTOSAI for specific issues. This approach shows that despite the differences between public and private sector auditing, there is a place for beneficial cooperation.
While internal and external auditors within the public sector have different roles, they share the same broad purpose of promoting good governance by contributing to the sound use of public resources and promoting efficient, effective, and economic public administration.
On a global level, INTOSAI and the IIA have cooperated closely and will continue to share their experiences. In his speech to the IIA Board in July 2008, Dr. Josef Moser, INTOSAI’s Secretary General, encouraged greater collaboration between the IIA and INTOSAI. Strengthening cooperation and ties between these two global organizations is highly desirable and will also greatly benefit all concerned at the national level. Even though the internal audit function may be organized differently in different countries, effective internal audit is a fundamental component of good governance. To be good partners in the audit field, we should share a common language and understand our respective roles, responsibilities, and expectations.
Finally, I would like to reflect upon comments by the chairman of INTOSAI’s Governing Board, Arturo González de Aragón, in the last issue of this Journal. He stated that the future always presents challenges and that we must keep up with the pace of change if we want to influence events, instead of merely reacting to them. History waits for no one. For INTOSAI to become a model international organization, he affirmed, all of us must intensify international exchanges, become acquainted with best practices, and share new methodologies in the audit profession. He observed that the synergy created by incorporating these efforts within the framework of our strategic plan has already allowed us to attain real outcomes in INTOSAI. I believe that this a very good description of the arena in which INTOSAI operates and an encouragement to all of us to strengthen our efforts.
In the January issue of this Journal, I will discuss INTOSAI’s communications strategy, which is being developed by a task force headed by INTOSAI’s Secretary General. By that time, the task force will have had its first meeting in Vienna in connection with the 58th meeting of the Governing Board.
Please feel free to contact me at astrup@rechnungshof.gv.at if you have any comments or feedback on issues related to the implementation of INTOSAI’s strategic plan.