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INTOSAI International Journal Of Government Auditing: 

April 2006: 
Volume 33, No. 2: 

Board of Editors: 
Josef Moser, President, Rechnungshof, Austria: 
Sheila Fraser, Auditor General, Canada: 
Faiza Kefi, First President, Cour des Comptes, Tunisia: 
David M. Walker, Comptroller General, United States of America: 
Clodosbaldo Russian Uzcategui, Comptroller General, Venezuela: 

President: Helen H. Hsing (U.S.A.): 

Editor: Donald R. Drach (U.S.A.): 

Assistant Editors: 
Linda J. Sellevaag (U.S.A.): 
Christopher Lyons (U.S.A.): 

Associate Editors: 
Office of the Auditor General (Canada): 
Sudha Krishnan (ASOSAI-India): 
Luseane Sikalu (PASAI-Tonga): 
CAROSAI Secretariat (St. Lucia): 
EUROSAI General Secretariat (Spain): 
Khemais Hosni (Tunisia): 
Yadira Espinoza Moreno (Venezuela): 
INTOSAI General Secretariat (Austria): 
U.S. Government Accountability Office (U.S.A.): 

Administration: 
Sebrina Chase (U.S.A.): 

Members of the Governing Board of INTOSAI: 
Arpád Kovács, President, Allami Számvevöszék, Hungary, Chairman: 
Arturo González de Aragón, Auditor General, Auditoría Superior de la 
Federación, Mexico, First Vice-Chairman: 
Osama Jaffer Faquih, President, General Auditing Bureau, Saudi Arabia, 
Second Vice-Chairman: 
Josef Moser, President, Rechnungshof, Austria, Secretary General: 
Henri Bruno Bessin, Inspector General, Inspecteur Général d’Etat, 
Burkina Faso: 
Paul R.S. Allsworth, Director of Audit, Cook Islands Audit Office: 
Vijayendra Nath Kaul, Comptroller and Auditor General, India: 
Muneharu Otsuka, President, Board of Audit, Japan: 
Yun-Churl Jeon, Chairman, Board of Audit and Inspection, Korea: 
Guillermo Argüello Poessy, President, Consejo Superior de la 
Contraloría General, Nicaragua: 
Juergen Kosmo, Auditor General, Riksrevisjonen, Norway: 
Guilherme D’Oliveira Martins, President, Tribunal de Contas, Portugal: 
Albert Edwards, Director of Audit, National Audit Office, St. Kitts 
and Nevis: 
Faiza Kefi, First President, Cour des Comptes, Tunisia: 
Sir John Bourn, Comptroller and Auditor General, National Audit 
Office, United Kingdom: 
David M. Walker, Comptroller General, Government Accountability 
Office, United States of America: 
Guillermo Ramírez, President, Tribunal de Cuentas de la República, 
Uruguay: 
Clodosbaldo Russián Uzcátegui, Comptroller General, Venezuela: 

The International Journal of Government Auditing is published 
quarterly (January, April, July, October) in Arabic, English, French, 
German, and Spanish on behalf of INTOSAI (International Organization 
of Supreme Audit Institutions). The Journal, which is the official 
organ of INTOSAI, is dedicated to the advancement of government 
auditing procedures and techniques. Opinions and beliefs expressed are 
those of editors or individual contributors and do not necessarily 
reflect the views or policies of the organization. 

The editors invite submissions of articles, special reports, and news 
items, which should be sent to the editorial offices at: 

U.S. Government Accountability Office: 
Room 7814, 441 G Street, NW: 
Washington, D.C. 20548: 
U.S.A. 
(phone: 202-512-4707; 
fax: 202-512-4021; 
e-mail: intosaijournal@gao.gov) 

Given the Journal's use as a teaching tool, articles most likely to be 
accepted are those that deal with pragmatic aspects of public sector 
auditing. These include case studies, ideas on new audit 
methodologies, or details on audit training programs. Articles that 
deal primarily with theory would not be appropriate. 

The Journal is distributed to INTOSAI members and other interested 
parties at no cost. It is also available electronically at 
http://www.intosaijournal.org or http://wwwintosa.org and by 
contacting the Journal at spel@gao.gov. 

Articles in the Journal are indexed in the Accountants' Index 
published by the American Institute of Certified Public Accountants 
and included in Management Contents. Selected articles are included in 
abstracts published by Anbar Management Services, Wembley, England, 
and University Microfilms International, Ann Arbor, Michigan, U.S.A. 

Contents: 

New Journal Web Site: 

Editorial: 

Spotlight on the Strategic Plan: 

News in Brief: 

Professional MBA Public Auditing: 

Audit and Civil Society: 

Audit Profile: Venezuela: 

Reports in Print: 

Inside INTOSAI: 

IDI Update: 

INTOSAI Calendar: 

[End of section] 

Editorial: 

21st Century Challenges: A Role for SAIs in Managing Change and 
Mitigating Risk: 

David M. Walker: 
Comptroller General of the United States: 

{Photograph of David M. Walker] 

Nations around the world face an array of current and emerging 
challenges. Some of these challenges are country specific, while 
others—such as environmental and public health issues—know no 
geographic or political boundaries. In some cases, these challenges 
will bring great opportunities that can be capitalized on, but there 
will also be serious risks that must be managed. 

Several powerful trends that were little known just a generation ago 
are rapidly reshaping our world. These include the globalization of 
markets, enterprises, and information; changing demographics, 
including aging populations in much of the developed world; the 
emergence of terrorism as a major security threat; and the changes 
wrought by rapidly evolving technologies. The United States and many 
other countries are also experiencing a growing and unhealthy gap 
between the haves and the have-nots. 

Over the years, supreme audit institutions (SAI) have earned a 
reputation for promoting transparency, fighting corruption, improving 
government performance, and ensuring public accountability. I believe 
SAIs can leverage that credibility to address the long-term trends I 
have just described. Increasingly, audit offices should be prepared to 
anticipate future challenges; sound the alarm when necessary; and 
propose options for addressing issues, managing change, and mitigating 
risk. 

Obviously, different trends will not affect all nations and SAIs in 
the same way. Perhaps the most urgent issue for the United States is 
its deteriorating fiscal outlook. Most nations face some degree of 
long-term fiscal risk. For example, a 2005 European Commission report 
warned that because of the growing old-age dependency ratio in Europe, 
there is "a risk of unsustainable public finance emerging in about 
half of the European Union member states." 

However, the difference is in the scope and potential effect of the 
U.S. situation. Today, the United States confronts not one but four 
interrelated deficits that threaten its long-term standard of living 
at home and its future role in the world. These are (1) a growing 
federal budget deficit, (2) a personal savings deficit, which is 
particularly alarming in its aging society, (3) a balance-of-payments 
deficit, and, (4) perhaps most sobering of all, a leadership deficit. 

In both government and private industry, there have been few calls for 
fundamental reform or shared sacrifice. In fact, the U.S. government's 
continuing lack of fiscal discipline has only made things worse. The 
U.S. business community has been largely silent on this growing fiscal 
imbalance, but it has the potential to be an important champion of 
change. Private industry has a strong stake in this issue because if 
the federal government continues on its present course, companies are 
going to pay a price, such as higher borrowing costs, rising taxes, or 
slower economic growth. 

It would be a mistake to conclude, however, that America's fiscal 
problems are strictly a domestic concern. The continuing health of the 
U.S. economy promotes global stability and provides economic 
opportunities for both the developed and the developing world. 

As head of the U.S. Government Accountability Office (GAO), I have 
been speaking out lately on this and other looming challenges facing 
my country. In newspaper and magazine articles and speeches before 
various audiences, I have tried to both explain the problem and 
suggest ways to turn things around. For example, I strongly advocate 
greater transparency in federal finances along with a top-to-bottom 
review of what the U.S. government does and how its does business. 
Since most SAIs are insulated from day-to-day political pressures and 
have a reputation for professionalism, independence, and integrity, 
they can and should be playing a similar "foresight" role. 

Collaboration will be important to the success of these efforts. By 
partnering with their peers, SAIs will be able to draw on a range of 
best practices and professional standards to help them develop 
solutions to national or even regional concerns. This is one reason we 
at GAO are so strongly committed to working with our overseas 
counterparts and with international auditing organizations such as 
INTOSAI. In a world that is growing smaller every day, global 
convergence on major accounting and audit standards, reporting models, 
and audit reports is not only desirable, it is essential. Accounting 
and reporting practices in Brazil or Belgium should be equally 
understandable to auditors elsewhere in the world. I am happy to 
report that significant progress is being made in this area, along 
with the development of ethical codes for government auditors and the 
establishment of best practices on vital issues like public debt 
management, environmental auditing, and privatization. 

More than ever, SAIs have an opportunity and obligation to encourage 
sound and sustainable policy choices. These choices are more likely 
when policymakers are equipped with solid facts and unbiased analyses, 
not political spin. 

Recent history provides two examples of countries whose leaders took 
very different approaches to looming challenges. Before World War II, 
Argentina was one of the most prosperous nations in Latin America. 
Today, largely because of a combination of poor policy choices and 
outright inaction, Argentina has serious economic problems. In 2001, 
it experienced the largest public debt default in history, and its 
standard of living has steadily eroded. 

On the other hand, there is New Zealand, which—like the United States, 
Europe, and Japan—has an aging population. Unlike the United States, 
however, New Zealand has taken steps to deal with the growing burden 
associated with its government pension system and other public 
benefits. At the same time, New Zealand has begun to transform how its 
government does business. New Zealand is a work in progress, but at 
least its leaders have acknowledged the challenges at hand and have 
begun to address them. 

It is time for the United States and many other nations to face facts 
and prepare for the known challenges that lie ahead. The truth is, 
whether we live in Washington or Moscow, Beijing or Buenos Aires, or 
Cairo or Canberra, we are increasingly in
the same boat. No country or SAI can or should try to do it alone, and 
the more we partner together to develop solutions to these shared 
problems, the greater the chances of success. The choice is simple. We 
can start rowing together, or we can risk sinking separately. 

[End of section] 

Spotlight on the Strategic Plan: 

INTOSAI Strategic Plan: Building on the Past, Creating the Future: 

By Osama Faquih, President, General Auditing Bureau, Saudi Arabia, and 
David M. Walker, Comptroller General of the United States: 

[Editor's note: This installment of "Focus on the Strategic Plan" 
features a special article by Osama Faquih, chair, and David Walker, 
vice-chair, of the INTOSAI Governing Board's Finance and 
Administration Committee. Mr. Faquih and Mr. Walker report on the 
committee's recent meeting and share their thoughts on the progress 
INTOSAI has made in implementing its strategic plan.] 

We are pleased to write this article about recent events related to 
the implementation of INTOSAI's strategic plan, which was unanimously 
adopted just a year and a half ago at our Budapest Congress. We focus 
here on the recent meeting of the Finance
and Administration Committee in Riyadh, where we were pleased to 
welcome the new Auditor General of Norway, Mr. Juergen Kosmo, as well 
as Dr. Klaus-Henning Busse, INTOSAI's newly appointed Director of 
Strategic Planning. 

Since the Budapest Congress in 2004, both of us have been very 
impressed with the energy and enthusiasm that INTOSAI and its various 
organizations have demonstrated in implementing the strategic plan. 
Whether regional groups, committees, task forces, the INTOSAI 
Development Initiative (IDI), or this Journal, all are focusing on how 
they can align their planning and related programs and activities with 
the strategic plan and raise the organization to greater heights. 

The Governing Board's Finance and Administration Committee has been at 
the center of the plan's implementation. We have convened three 
meetings since the plan was adopted—Vienna in January 2005, Washington 
in July 2005, and Riyadh in February 2006. A summary of the outcomes 
of our most recent meeting in Riyadh—attended by the auditors general 
of all seven member countries—reflects the progress we are making on 
many fronts. The following issues were discussed in Riyadh, and the 
committee agreed on specific recommendations that will be considered 
by the Governing Board at its annual meeting in November 2006 in 
Mexico City. 

Framework for Dealing with External Funding: 

The committee's discussion on this topic was grounded in two concepts: 
the value of developing strategic partnerships with international 
development organizations sharing INTOSAI's values and objectives and 
the need for INTOSAI to adopt a standard approach to working with 
donors. Underlying this discussion was the clear recognition that 
INTOSAI must maintain its independence from donors in both fact and 
appearance and that such partnerships should not have any direct or 
perceived conflict of interest with INTOSAI and its core values. A 
resolution on this issue was prepared for presentation to the board in 
November; it includes recommendations that (1) through its Governing 
Board, INTOSAI should maintain central decision-making authority and 
control over any matters to which the funding applies and (2) funding 
requests to donors by INTOSAI's enterprisewide bodies (including, but 
not limited to, committees, working groups, task forces, and central 
bodies such as the General Secretariat, the Journal, and IDI) should 
be coordinated centrally and in advance with INTOSAI's Governing Board 
and General Secretariat and with input from the Finance and 
Administration Committee. 

Importantly, the committee recognized that INTOSAI's regional working 
groups must retain autonomy in dealing with donors (such as regional 
development banks) and will not be subject to the terms of this 
resolution. At the same time, we recognize the benefits of regional 
working groups sharing information on donor relations centrally and 
with other regional working groups. Of course, individual SAIs' 
relations with donors and bilateral-related matters remain outside the 
scope of the committee's recommended policy. 

Communications Policy and Tools: 

India has taken the lead on these issues in its role as board liaison 
for goal 3, knowledge sharing. We had an excellent discussion on these 
issues, and all delegates expressed appreciation to India for the 
quality of the draft global communications policy it has prepared. 
Much of our discussion focused on the benefits of distinguishing 
between external and internal communications, with an emphasis on 
establishing a clear and coordinated approach to external 
communications. In this context, the committee noted more than once 
the importance of INTOSAI's (1) establishing itself as a recognized 
expert in the fields of accountability, transparency, and governance 
and (2) becoming a more visible and active player on the international 
stage. 

Regarding the proposed collaboration tool, some questions were raised 
about cost and content, and India will conduct a user survey to assess 
the commitment of INTOSAI's bodies to using the proposed tool. At the 
same time, a number of delegates stressed the importance of linking 
all SAIs to the Internet. 

Associate Membership in INTOSAI: 

As with the earlier agenda items, we again had a very good discussion 
on the important question of associate membership. After considerable 
deliberation, the committee agreed on recommending a phased-in 
approach to accepting associate members, with three criteria for 
entities seeking associate membership: they must be (1) international 
organizations that operate on a global scale, (2) organizations 
directly or indirectly involved in such issues as accountability, 
transparency, anticorruption, and governance, and (3) governmental, 
nonprofit, or not-for-profit organizations. Based on these criteria, a 
list of potential associate members is being developed for the board's 
consideration. 

[Photograph: Finance and Administration Committee members and staff 
take a break during the Riyadh meeting for a group photo] 

Financial Matters: 

The Secretary General updated the committee on INTOSAI's financial 
situation. He highlighted the fact that the board had adopted earlier 
recommendations made by the Finance and Administration Committee and 
that INTOSAI's Financial Rules and Regulations had been revised to 
reflect these changes. The matter of INTOSAI dues was also discussed. 
It was noted that the strategic plan mandated that the committee 
address this issue and that INTOSAI membership dues have not been 
raised since 1983. The committee asked the General Secretariat to 
propose alternate scenarios and agreed on an option that will be 
presented first to the board in 2006 and then to the full membership 
at the 2007 INTOSAI Congress in Mexico. The option acknowledges the 
basic principle that any increase for those SAIs least able to absorb 
it would be less than that for other SAIs and that dues for all SAIs 
would be subject to indexing for inflation every 3 years. 

Update on Capacity Building Committee's Interaction with Donors
In his role as board liaison to the Capacity Building Committee (CBC), 
Mr. Walker reported that he and Dr. Ahmed El-Midaoui, CBC chairman and 
President of the Cour des Comptes of Morocco, met with top officials 
of international and national development organizations in Washington 
last October to discuss opportunities for strategic partnerships with 
INTOSAI. The meetings supported the strategic plan's mandate that the 
committee "develop partnerships with international development 
organizations, consistent with INTOSAI's independence requirements." 
In each meeting, there was general agreement that INTOSAI and the 
donors shared common goals on issues such as accountability, 
governance, transparency, and anticorruption and that the timing is 
right to further develop strategic partnerships. 

Possible Revenue from Publication Sales and Training Fees: 

Mr. Kosmo, Auditor General of Norway, summarized a paper on this 
subject by recommending that INTOSAI publications and training remain 
available free of charge. Mr. Kosmo stated that those SAIs most in 
need of the publications are also those least able to pay for them. In 
addition, with the increased use of the Internet and related 
technology, the publications are available at no cost on the World 
Wide Web and should remain so. The committee fully agreed with this 
conclusion and pointed out that the issue could be revisited in the 
future if the board wants to consider charging nonmembers for these 
products. It was also noted once again that all SAIs need to be 
connected to the Internet. 

Other Business: 

Before the meeting concluded, Mr. Walker raised the issue of 
performance indicators in connection with the strategic plan, noting 
the importance of INTOSAI, as an accountability organization, 
measuring and reporting on its progress. Delegates agreed with the 
concept, and the Secretary General reported that he and the Director 
of Strategic Planning, Dr. Klaus-Henning Busse, had already begun 
planning for performance measures. They will continue to develop a 
plan for this effort and will circulate it to Finance and 
Administration Committee members in the coming months for review and 
comment. They will also report to the board on the plan at the 
November meeting. Mr. Walker also made a brief presentation on plans 
for transforming the Journal that include a more dynamic Internet 
presence. A number of delegates offered useful suggestions that 
Journal management will take into consideration as the transformation 
project develops in the coming months. 

As we implement the strategic plan, the same principles that were key 
to its development—consultation, compromise, and consensus—are very 
much at play. For example, the work of the Finance and Administration 
Committee is truly a team effort, with each SAI working hard to ensure 
progress. The purpose of the strategic plan is to take INTOSAI and our 
individual SAIs to a higher level of capacity for oversight, insight, 
and foresight. Clearly, activities across INTOSAI to date are helping 
to move us all toward that goal while at the same time building 
bridges between our institutions. 

[End of section] 

News in Brief: 

Armenia: 

Changes in the Status of the Control Chamber: 

The Control Chamber of the National Assembly of the Republic of 
Armenia (RA) recently celebrated its 10th anniversary. To reflect its 
experience during these years, the Control Chamber is undergoing 
changes within the ongoing general reforms of Armenia's auditing 
system. During this year, the Control Chamber will be granted a new 
level of independence and a wider range of responsibilities. 

One of the primary changes relates to the Control Chamber's status. 
Unlike most SAIs, the Armenian Control Chamber is part of the 
parliamentary structure. However, the amendments to the Constitution 
that came into force after the referendum of November 27, 2005, 
include new, more progressive provisions regarding the Chamber's 
status. According to the Constitution, the Chamber has been renamed the
Chamber of Control of the RA. It will act as an independent body in 
compliance with international criteria for the work of SAIs. It will 
monitor the use of funds in the state budget as well as state and 
local property. 

A new procedure for appointing the head of the Control Chamber has 
been established. He will be appointed to a 6-year term by the 
National Assembly on the recommendation of the President of Armenia. 
The National Assembly will approve the Chamber's annual audit plan and 
consider its report on the results of its activities not less than 
once per year. The Chamber's work procedures and jurisdiction will be 
prescribed in more detail by law, so the Armenian Chamber of Control--
supported by the World Bank and a German organization (GTZ)--is 
working on a draft confirming its new status. 

For additional information, contact the Control Chamber: 

Fax: ++374 (1) 58 85 42, 52 02 01: 
E-mail: vpal@parliament.am: 
Web site: www.parliament.am/controlchamber] 

Bhutan: 

New Auditor General: 

In preparation for the implementation of the first draft Constitution 
of Bhutan, the Royal Government of Bhutan appointed Mr. Ugen Chewang, 
the former Director of the National Pension and Provident Fund Bureau, 
as the Honorable Auditor General of Bhutan, one of the first three 
constitutional posts established in December 2005 under a royal 
decree. As enshrined in the draft Constitution, the post of Auditor 
General of Bhutan will come into effect starting in 2008. Mr. Ugen 
Chewang formally assumed the office of Auditor General, Royal Audit 
Authority (RAA), on January 13, 2006. Senior officials of the Royal 
Audit Authority witnessed the transfer from the outgoing to the 
incoming Auditor General. 

[Photograph: Ugen Chewang] 

Mr. Ugen Chewang was born in 1956 in Chenary, Deothang, Samdrup 
Jongkhar. After completing his early education in Bhutan, he received 
a bachelor of commerce degree from Punjab University in India in 1978 
and received a master of business administration from Syracuse 
University in the United States in 1985. 

He began his career as an auditor in 1979, serving in the RAA in 
various capacities--from trainee officer to assistant audit officer to 
the deputy auditor general. In 2000, Mr. Ugen Chewang was promoted and 
transferred to the National Pension and Provident Fund Bureau, where 
he served as the director for 6 years before assuming his current 
appointment as the Honorable Auditor General of Bhutan. 

IT Training Program: 

Twelve auditors from the RAA attended Auditing in an Information 
Technology (IT) Environment, a customized training program developed 
under the Netherlands Fellowship Program (NFP). The program ran from 
November 4, 2005-January 16, 2006, and involved three distinct phases: 
the first two weeks were in Bhutan in November followed by a week in 
the Netherlands in December and a week in Bhutan in January. 

Two resource persons from the Centre for International Cooperation of 
the Vrije Universiteit Amsterdam—-Ms. Margaret Elinor Hershey, IT 
auditor, and Mr. Gerrit Johannes Van Der Piji, professor of IT 
auditing—-delivered the training in Bhutan. The training covered the 
auditor's view of information systems/IT management, the development 
of information systems, internal controls, databases and data 
communications, IT security, introduction to IT auditing, procedures 
and techniques, and CAATS (computer-assisted auditing techniques and 
systems). Ms. Cecilia Keizer, Honorary Consul, Consulate of the 
Netherlands in Bhutan, was present for the opening ceremony
on November 7, 2005, at the RAA Conference Hall. 

During his address at the closing ceremony on January 13, Mr. Ugen 
Chewang, the Honorable Auditor General of Bhutan, stressed the need 
for auditors to continually update their knowledge and skills in IT 
and IT auditing through training such as the recently completed 
course. Dasho Kunzang Wangdi, the Chief Election Commissioner of 
Bhutan, was the guest of honor for the closing ceremony and awarded 
certificates to the participants. 

For additional information, contact the RAA: 

Fax: ++975 2 32 34 91: 
E-mail: raa@druknet.net.bt: 
Web site: www.bhutanauditgov.bt: 

Brazil: 

Cooperation Project with East Timor: 

The Brazilian Court of Audit (TCU) will take part in a cooperation 
program in East Timor. Recently, representatives of the East Timor 
Parliament requested technical assistance with legislative and 
oversight activities. The TCU will send two auditors to East Timor to 
work in the areas of monitoring and overseeing budgetary execution. 
Each auditor will stay in the country for 6 months: the first from 
April to October 2006 and the second from October 2006 to April 2007. 

In addition to work on monitoring budgetary execution, the TCU 
auditors will exchange their know-how and experiences with native 
professionals. This exchange will allow the East Timorese staff to 
learn methodologies and techniques they can continue to use after the 
conclusion of the cooperation program. 

The TCU's project is part of a larger cooperation program being 
coordinated by the Brazilian Cooperation Agency (ABC), the Brazilian 
Foreign Relations Ministry, and the United Nations Development 
Programme (UNDP). Its goal is to implement projects in the fields of 
agriculture, education, professional training, health, and justice. 

For additional information, contact the TCU: 

Fax: ++55 (61) 3316 - 7522: 
E-mail: MIN-AM@tcu.gov.br.arint@tcu.gov.br: 
Web site: www.tcu.gov.br: 

People's Republic of China: 

Third International Training Program: 

To strengthen exchanges and cooperation between the National Audit 
Office of the People's Republic of China (CNAO) and the members of 
SPASAI (South Pacific Association of Supreme Audit Institutions), the
CNAO hosted an international training program for 21 auditors general
and other senior auditors from 12 SPASAI member countries. The program 
was held November 20-30, 2005, in Guangzhou, China. Mr. Li Jinhua, 
Auditor General of the CNAO, delivered a welcome speech at the opening 
ceremony. This was the third training activity that the CNAO hosted 
during the past 4 years. Auditors from 45 countries in Asia, Africa, 
Europe, and the South Pacific attended these programs. 

The 2005 training program was designed specifically for countries in 
the South Pacific area with the support and assistance of the Ministry 
of Commerce of the Guangdong Provincial Government and various private 
sector companies. During the training and exchange sessions in 
Guangzhou, Mr. Liu Jiayi, Deputy Auditor General of the CNAO, and 
other CNAO audit experts gave presentations on China's economy and 
audit system, the legal framework for auditing in China, and the 
experiences and achievements of the CNAO. The specific topics 
presented and discussed included financial audit, economic 
accountability audit, environmental audit, public investment audit, 
performance audit, IT audit, and the training and management of 
auditors. Presenters discussed the history of auditing in China as 
well as the CNAO's efforts to promote the modernization of auditing in 
China. In addition to training and exchange activities, participants 
were briefed by the staff of the CNAO's Guangzhou office and visited 
the cities of Guangzhou, Dongguan, Shenzhen, and Beijing to experience 
firsthand the achievements of China since it initiated its reform 
policies more than 20 years ago. This international training program 
promoted deepened friendships between the people of China and the 
South Pacific and also enhanced the cooperative and intercommunicative 
relations between the CNAO and the SAIs of SPASAI. 

For additional information, contact the CNAO: 

Fax: ++86 (10) 68 33 09 58: 
E-mail: cnao@audit.gov.cn: 
Web site: www.audit.gov.cn: 

Costa Rica: 

New Comptroller General: 

Rock) Aguilar has been named the first woman Comptroller General of 
Costa Rica. To meet the demands of the future, she is promoting 
significant changes to the organization of the Costa Rican SAI. Her 
priorities include strengthening the role of internal audits, 
developing a closer relationship with Congress, and developing an 
institutional strategy to achieve the goals of the SAI in Costa Rican 
society. 

[Photograph: Rocio Aguilar] 

Ms. Aguilar graduated from the University of Costa Rica and received a 
law degree from the Public School of Law in Costa Rica. Before 
assuming her new position, she was the technical coordinator of the 
National Council for the Public Works Concession from 2002-2005. From 
1981-2000, she was the corporate manager of the BANEX Corporation. She 
served as a board member and president of the Costa Rican Development 
Foundation. She was also vice president of the Costa Rican Banking 
Association. She has attended numerous national and international 
seminars on finances, banking, and public concessions. 

For additional information, contact the Comptroller General's Office: 

Fax: ++506 220 43 85, 296 05 63: 
E-mail: contraloriageneral@cgr.go.cr: 
Web site: www.cgrgo.cr: 

Japan: 

New President and Commissioner Appointed: 

Mr. Muneharu Otsuka, one of three Commissioners of the Board of Audit 
of Japan, was appointed President of the Board of Audit on January 27, 
2006, succeeding Mr. Nobuaki Morishita, who retired on January 20, 
2006. The President of the Board is appointed by the Cabinet based on 
a peer election among the three Commissioners. Mr. Otsuka had served 
as a Commissioner since July 2002. During that time, he emphasized the
importance of the board's involvement in international activities 
through INTOSAI and ASOSAI as well as the board's auditing of Japan's 
public finances. Mr. Otsuka participated in the Organisation for 
Economic Cooperation and Development World Forum-Statistics, Knowledge 
and Policy in Palermo in 2004. Before his appointment to the board, he 
was a professor of commerce at Waseda University, specializing in 
accounting for financial instruments. At the same time, he was the 
Executive Director of the National Life Finance Corporation Research 
Institute. He was also a member of the government advisory board on 
corporate accounting and derivatives. 

[Photograph: Muneharu Otsuka] 

In a related move, Mr. Kazuhiko Fushiya was appointed as a 
Commissioner of the Board on January 23, 2006. Before his
appointment, he worked for the Ministry of Finance, where he held such 
prominent positions as Secretary of the National Tax Agency. 

For additional information, contact Board of Audit of Japan: 

Fax: ++81 (3) 32 92-6915: 
E-mail: liaison@jbauditgo.jp: 
Web site: www.jbauditgajp/engl: 

Republic of Latvia: 

The State Audit Office's Strategic Development Plan and Collaborative 
Projects: 

In January 2006, the State Audit Office (SAO) Council approved a 
strategic development plan for 2006-2009. The plan critically 
evaluates the current situation within the SAO in the following areas 
and provides long-term development goals and milestones to be achieved 
in two stages: by July 2007 and by December 2008. 

* Strengthening the SAO's role as external auditor. This involves 
improving the quality of the SAO's work through better audit 
procedures and methodologies, audit reporting, and follow-up of audit 
recommendations; developing procedures to promote greater 
understanding of the SAO's professional code of ethics; and improving 
communication with audited entities. 

* Sustainable development of the SAO. This involves efforts to 
harmonize the SAO's strategic tasks with the objectives of audit 
departments, support units, and individual employees and to align SAO 
budget requests with the results achieved through its audits and, 
where possible, with links to efficiency indicators. This also 
includes efforts to promote the involvement of staff in the SAO's 
further development and to develop future managers. 

* Human resource management. This includes initiatives to improve all 
aspects of human resource management within the SAO; introduce a 
structured training program for audit staff and other specialists; 
facilitate and encourage teamwork within the SAO; and increase the
information technology skills of SAO employees. 

Over the past year, the SAO has been involved in two collaborative 
projects with other SAIs. The first, a bilateral project with the 
Netherlands's Court of Audit (NCA), has enhanced the newly created 
Revenue Audit Section's capacity to undertake financial and regularity 
audits of revenue. With the NCA's assistance, the SAO developed a long-
term strategy for revenue audits, which includes a risk analysis of 
different revenue streams and tax collection procedures of various tax 
departments. The project ran from June 2005 through March 2006 and 
provided practical help on the first pilot audit of tax revenues. 

The second was a European Union-funded twinning project with the 
United Kingdom National Audit Office (with the Netherlands Court of 
Audit as junior partner). Since February 2005, this project has 
provided assistance with a wide range of SAO activities. This 
assistance has included restructuring the SAO, providing technical 
training for financial and performance auditors, developing a new pay 
and grading system for auditors, introducing a staff performance 
appraisal system, assisting in the audit of EU funds, and helping to 
increase the use of information technology in audits and the SAO's 
administration. The project is scheduled to run through August 2006. 

For additional information, contact the SAO: 

Fax: ++371 (7) 01 76 73: 
E-mail: Irvk@lrvk.gov.lv: 
Web site: www.ln/k.gov.lv: 

Malaysia: 

New Auditor General Appointed: 

Tan Sri Dato' Setia Haji Ambrin bin Buang was appointed the Auditor 
General of Malaysia on February 22, 2006, upon his retirement after 
more than 35 years in the Malaysian civil service. Prior to his 
appointment, he had been Secretary General of the Ministry of 
Education since October 2001. 

Tan Sri Dato' Setia Haji Ambrin was born in 1949 and has a bachelor of 
economics degree (with honors) from the University of Malaya (1971) 
and a master in international business from the University of South 
Carolina, United States (1981). 

During his career, he worked in the Ministry of Trade and Industry 
from 1971 to 1982, where he was appointed Deputy Director of the Small 
Scale Industries Division in 1981. He also served on the Malaysian 
Timber Industry Board from 1982 to 1987 and in the National Institute 
of Public Administration from 1987 to 1991. 

From 1992 to March 1995, Tan Sri Dato' Setia Haji Ambrin was Minister 
for Economic Affairs and Deputy Head of Mission at the Malaysian 
mission in Tokyo, Japan. He was a Senior General Manager for the Kuala 
Lumpur International Airport Berhad from April 1995 to February 1999 
and the State Secretary of the Selangor state government from March 1999
to September 2001. He is currently a member of the Selangor Royal 
Chamber. 

For his services, he has been awarded several decorations from the 
Malaysian federal government. These include the Panglima Setia Mahkota 
(PSM), which confers the title Tan Sri, in 2005 and Kesatria Mangku 
Negara (KMN) in 1990. From the state government of Selangor, he 
received the Darjah Paduka Mahkota Selangor (DPMS), which confers the 
title Dato', in 2000. He also received a conferred decoration from His 
Royal Highness Sultan of Selangor Darjah Dato' Setia Sultan 
Sharafuddin Idris Shah, which carries the title Dato' Setia, in 
December 2005. 

For additional information, contact the Office of the Auditor General 
of Malaysia: 

Fax: ++60 (3) 88 88 97 01, 88 88 30 84: 
E-mail: jbaudit@audit.gov.my, ag@audit.gov.my: 
Web site: www.audit.gov.my: 

Malta: 

National Audit Office Annual Reports: 

The Auditor General of Malta submitted his annual audit report to the 
Speaker of the House of Representatives before year-end 2005. The 
report covers audits carried out during the second part of 2005 for 
the financial year ending December 31, 2004, and also refers to the 
audits carried out during the first part of 2005 that were published 
in the midyear audit report tabled in the House in July 2005. The 
audit opinion in the annual audit report also covers the midyear audit 
report. 

The report identifies areas of concern relating to the 2004 government 
financial report, such as the public debt, investments, and variances 
in ordinary revenue and expenditure. It also reports on governmentwide 
issues, such as arrears of revenue due to the government, and issues 
relating to specific government departments. 

It identifies shortcomings related to local governments' lack of 
compliance with relevant rules and regulations and certain noncentral 
government organizations' lack of full compliance with International 
Financial Reporting Standards. 

In January 2006, the Auditor General presented his annual report on 
the work and activities of the National Audit Office (NAO) for 2005 to 
the Speaker of the House of Representatives. Besides giving the NAO's 
legal background, the report describes its organization and the 
different types of audits it carries out—financial and compliance, 
performance, and special/investigative audits. The latter are carried 
out on behalf of the Public Accounts Committee of the House of 
Representatives. 

The report describes the NAO's relationship with the House of 
Representatives through the Public Accounts Committee and through the 
National Audit Office Accounts Committee, which reviews the NAO's
activities, budget, and audited financial statements. It also 
discusses the NAO's code of ethics and guidelines and gives an 
overview of developments relating to the office's information and 
communications technology; staff mobility, qualifications, and 
recruitment; and local and overseas training activities. The report 
covers the NAO's bilateral and multilateral relations with SAIs and 
other organizations during the year and current and future changes and 
challenges that the NAO faces. 

For additional information, contact the NAO: 

Fax: ++356 21 22 07 08: 
E-mail: joseph.g.galeat@gov.mt: 
Web site: www.nao.gov.mt: 

Nicaragua: 

New Officers and Members of Superior Council Named: 

On February 7, 2006, the Superior Council of the Auditor General of 
Nicaragua unanimously elected Dr. Guillermo Arguello Poessy
as President and Mr. Luis Angel Montenegro as Vice President.
Dr. Jose Pasos Marciacq, Mr. Fulvio Palma Mora, and Dr. Lino Hernandez 
Trigueros were also elected as members of the council. They will serve 
from February 16, 2006, to February 16, 2007. 

For additional information, contact the General Audit Office: 

Fax: ++(505) 265-2075: 
E-mail: dri@cgrgob.ni: 
Web site: www.cgrgob.ni: 

Puerto Rico: 

Accomplishments of the Office of the Comptroller: 

The Comptroller of Puerto Rico has a constitutional duty to oversee
all revenues, accounts, and disbursements of the Commonwealth of 
Puerto Rico and to ascertain that all operations involving public 
funds and public property are performed according to applicable laws and
regulations. The oversight responsibility includes the three branches 
of government—executive, legislative, and judicial. 

On October 2, 1997, the present Comptroller, Manuel Diaz Saldana, was 
appointed to a 10-year term by the Governor, with the advice and 
consent of the majority of the members of the Senate and the House of 
Representatives, as required by the Constitution. 

The office adopted the total quality management philosophy and 
operates according to a strategic plan, which, together with the 
commitment and dedication to excellence of its personnel, has made it 
possible to attain significant goals. The office reported the 
following achievements: 

* consistently increasing the number of audit reports for the past 7 
years to a total of 2,002 for fiscal year 2004-2005; 

* implementing the Team Mate System, an electronic program designed to 
reduce the use of paper in the audit function; 

* establishing the OCPR.HOTLINE to receive and investigate internal 
complaints related to improper conduct, illegal acts, or possible 
infringement of internal norms and regulations; 

* providing orientation on the proper use of public funds and property 
in compliance with laws to 1,448 elected officials and 2,606 other 
government officials and employees; 

* improving 159 of 230 office processes (69 percent); and; 

* hand-delivering all audit reports to the Governor, the Presidents of 
the Senate and the House of Representatives, and the Chief Executive 
of the audited entity on the date of publication and posting them on 
the office Web page. 

The Office of the Comptroller is committed to helping improve public 
administration through an efficient and effective oversight function. 
To achieve its goal, the office counts on the cooperation of every 
public servant and the citizenry in general. 

For additional information, contact the Office of the Comptroller: 

Fax: ++(787) 751-6768: 
E-mail: ocpr@ocprgov.pr: 
Web site: www.ocprgov.pr: 

Uruguay: 
School of Government Auditing Becomes Part of Court of Accounts: 

A law recently passed by the Uruguayan Parliament made the School of 
Government Auditing, established in 2001, officially part of the Court 
of Accounts. Until recently, the school functioned with technical 
autonomy. It was managed by an academic council headed by a 
representative of the court; the council comprised representatives of 
the national public university, private universities, the Office of 
Planning and Budget, and the national internal audit office. 

Under the new law, the School of Government Auditing is now formally a 
dependent organ of the court. Its mission is to strengthen the 
capacity-building process for public officials and contribute to 
improvements and transparency in the management of the nation's 
government. 

For additional information, contact the Court of Accounts: 

Fax: ++598 (2) 916 75 07: 
E-mail: asint@tcrgub.uy: 
Web site: www.tcrgub.uy: 

Vietnam: 

State Audit Law Enacted: 

The State Audit Law of Vietnam, which was ratified by the Vietnamese 
National Assembly on June 14, 2005, was effective as of January 1, 
2006. It is the first law of its kind for Vietnam. 

Under the law, the Office of State Audit of Vietnam (SAV) shall be a 
specialized agency that controls state finances. It shall be 
established by the National Assembly, operate independently, and abide 
by the laws. 

The SAV is empowered to carry out financial, compliance, and 
performance audits on every agency or institution managing and using 
the state budget, funds, and assets. 

The auditor general will be elected for a 7-year term by the National 
Assembly with the consent of the prime minister. He/she may be 
reelected once at most. 

The SAV's annual audit reports will be sent to both the National 
Assembly and the government and will then be disclosed to the public. 
The National Assembly will decide on the annual budget and overall 
staff members of the SAV based on the auditor general's proposal. 

For more details, contact the Office of State Audit of Vietnam: 

Fax: ++84-4-5565517: 
E-mail: vietnamsai@hn.vnn.vn; kiemtoannn.gov.vn. 

European Union: 

New Members for the European Court of Auditors: 

On January 23, 2006, after consulting with the European Parliament, 
the Council of the European Union appointed five new members of the 
European Court of Auditors (ECA) for a term of 6 years starting in 
March 2006: Mr. Karel Pinxten (Belgium), Mr. Juan Ramallo Massanet 
(Spain), Mr. Massimo Vari (Italy), Mr. Olavi Ala-Nissila (Finland), 
and Mr. Lars Heikensten (Sweden). They replaced Mr. Reynders, Mr. 
Fabra Valles, Mr. Clemente, Mr. Salmi, and Mr. Tobisson, respectively. 
The new members of the ECA were formally sworn in at the Court of 
Justice of the European Communities on March 17, 2006. 

[Photograph: The five new ECA members after the swearing-in ceremony 
(from left to right): Karel Pinxten, Lars Heikensten, ECA President 
Hubert Weber, Olavi Massimo Vari, and Juan Ramallo Massanet] 

In addition, the Council renewed the mandates of the following current 
members of the ECA until February 2012: Mrs. Wire Geoghegan-Quinn 
(Ireland), Mr. Vftor Manuel da Silva Caldeira (Portugal), and Mr. 
Morten Louis Levysohn (Denmark). The new organization chart is 
available on: 

www.eca.eu.inVeca/organisation/eca_organisation_organigramme_en.htm. 

Meeting of the Contact Committee of the Heads of the European Union 
SAIs: 

Heads of the European Union (EU) SAIs held their 2005 Contact 
Committee meeting December 5-6 in Stockholm. 

Ms. Eva Lindstrom, Auditor General of Sweden, chaired the meeting. One 
of the main agenda items concerned developments in the debate on
improving management and control of EU funds. In June 2005, the 
European Commission had issued the Roadmap to an Integrated Internal 
Control Framework. During the December meeting, participants discussed 
the role of member states' SAIs in improving the control framework in 
a seminar entitled Improving Accountability for Community Funds: The 
Role of the EU's Independent SAIs. Terry Wynn, a member of the 
European Parliament and rapporteur for its 2003 budget discharge, 
acted as guest speaker, and former ECA President Jan 0. Karlsson led 
the debate. 

[Photograph: Heads of the European Union SAIs after their Contact 
Committee meeting in December 2005] 

The other main topic concerned progress since last year's decision to 
look at ways to enhance and facilitate the work of the Contact 
Committee. A number of governance issues were considered. Participants 
also examined the results from a number of working groups, and work in 
the context of enlargement was presented. 

Contact Committee Administrative Support Center: 

At the 2005 Contact Committee meeting, the creation of an 
administrative support center was one of the governance issues 
discussed. The President of the ECA, Hubert Weber, agreed on its 
behalf to host the center, which will ensure that the Contact 
Committee, its acting chair, and the liaison officers benefit from 
administrative support to facilitate its activities. This support 
includes collecting and distributing meeting materials, translating 
supporting documents needed to ensure that the meetings run smoothly 
(i.e., meeting notices, agendas, and minutes), and assisting with 
drafting meeting minutes. 

In its new role, the ECA will also administer the proposed Contact 
Committee Web site, while acting as a source of information on past, 
present, and future committee activities and archiving past meeting 
and activity materials. 

For additional information, contact the ECA: 

Fax: ++(352) 4398 46430: 
E-mail: euraud@eca.eu.int: 
Web site: www.eca.eu.int: 

[End of section] 

Professional MBA Public Auditing: 

By Josef Moser, President of the Austrian Court of Audit and Secretary 
General of INTOSAI: 

[Editor's note: This article describes the joint postgraduate study 
program for government auditors recently established by the Austrian 
Court of Audit and the Vienna University of Economics and Business 
Administration] 

Tasks and Challenges: 

The Austrian Court of Audit (ACA) has a long tradition. Like many 
other European supreme audit institutions (SAI), it dates back to the 
18th century. Its current legal basis was laid down in the 
Constitution enacted in 1929, after Austria became a republic. Since 
then, its audit authority has been expanded several times so that the 
ACA now has a wide-ranging audit mandate. 

The ACA audits public institutions, companies in which the government 
holds a minimum stake of 50 percent, social security institutions, 
statutory professional bodies, and public funds. In line with the 
ACA's strategic authority, policymakers follow its recommendations in 
the interest of the balanced, well-targeted, and economical use of 
public funds. 

Public finance is undergoing rapid change, as manifested by new 
performance delivery processes, forms of organization, lines of 
decision making and accountability, and channels of communication. In 
addition to safeguarding the principles of economy, efficiency, and 
effectiveness—as well as compliance with existing rules and 
regulations on the basis of regular and proper accounts—government 
auditors nowadays have to act as consultants, facilitate innovation, 
and promote networking to enhance the competitiveness of audited 
entities. 

These developments affect not only Austria but also nations around the 
world. Globalization calls for the sustained development of national 
administrations. While SAIs generally have a good reputation and 
excellent, well-trained staff, the changing environment in public 
administration, business, and industry continues to impose great 
demands on the quality of audit methods and audit findings as well as 
auditors' know-how and performance capacities. Scarce resources call 
for increased productivity and efficiency in public administration to 
improve the quality of public services. 

Training Response: Introduction of a Professional MBA Program: 

Given the changing environment, training is of prime importance. In 
all phases of the ACA's work—from the integration of new staff into 
the organization to professional and personal development—education 
and training are required. It is a fundamental principle that the 
professional expertise of SAIs must be at least as good as that of the 
audited bodies, which requires a continuous transfer of information 
and know-how to enable auditors to keep abreast of new developments. 
There is consistent pressure to improve efficiency and to upgrade 
quality to meet international standards. Furthermore, it should be our 
aim to link the latest scientific and professional knowledge with 
practical audit experience. 

With this in mind, the ACA has decided to set up a joint venture with 
the Executive Academy of the Vienna University of Economics and 
Business Administration to develop a postgraduate program in public 
auditing (see figure 1). The first course started in March 2006. 

Figure 1: Integrated Training Program for Public Audit Institutions: 

[Refer to PDF for image: illustration] 

Audit institutions: 
National Audit Offices: EU; 
National Audit Offices: EU Member States; 
Lander; 
City Audit institutions; 
Federal Ministries. 

Common European Training Program for Public Auditing: 

* General principles, guidelines and objectives; 
* Regularity and legality; 
* Adherence to the principles of economy, efficiency and effectiveness; 
* Cost-benefit analysis; 
* Common audit guidelines and procedures and their application: 
implementation, documentation and reporting. 

Source: Executive Academy, Vienna University of Economics and Business 
Administration. 

Note: Lander refers to the regional level of government (i.e., federal 
states/provinces). 

[End of figure] 

Objectives of the New Postgraduate Training Program: 

The postgraduate program has the following objectives: 

* provide the best possible training at the postgraduate level for ACA 
auditors, imparting the necessary practical skills, proficiency, and 
state-of-the art auditing at the academic level; 

* enable the university to gain insight into practical audit work and 
carry out practice-oriented methodological and scientific studies; 

* give auditors from other audit institutions (national, regional, and 
local audit institutions in Austria and abroad) appropriate practical 
and scientific training at the university level; 

* enable interested students to carry out in-depth analyses of public 
auditing issues and acquire the skills and expertise necessary for 
employment in this field;
	
* encourage audit institutions outside Austria to provide similar 
academic training for their auditing staffs to equip them for cross-
border audits (e.g., in the fields of environment, finance, and 
infrastructure); and; 

* establish a forum to deal with international guidelines and 
standards—such as the auditing standards of INTOSAI, the European 
Union, and the International Federation of Accountants—in a practice-
oriented and scientific manner. 

Curriculum: 

As shown in figure 2, the four-semester program consists of (1) a 
general component, the so-called common body of knowledge, which will 
be taught in semesters one and four, providing in-depth knowledge of 
general management and (2) specialized modules, which will be taught 
in semesters two and three, offering participants tailor-made courses 
in public auditing as well as an internship at the ACA. Candidates 
must write a thesis and, on successful completion of their studies, 
will be awarded a master of business administration (MBA) degree by 
the Vienna University of Economics and Business Administration. The 
teaching language—at least for the time being—will be German. 

Figure 2: Course Structure: 

[Refer to PDF for image: table] 

Common Body of Knowledge (CBK): 1st semester: 
General Management I; 
* Managing People and Organizations; 
* Data Analysis and Decision Making; 
* Operations Management; 
* Accounting; 
* Financial Management; 
* Marketing Management. 

Specialized modules: 2nd & 3rd semester: 
Financial Management and Accounting: 
* Internal Accounting; 
* Introduction to Investment Analysis; 
* External Financial Reporting; 
* Year-end Audit; 
* Adherence/Audit of IT systems. 

Public Sector Economics: 
* Economics of the Public Sector/Fiscal Policy; 
* Case Studies I; 
* Economics of Infrastructure; 
* Economic Evaluation; 
* Case Studies II. 

Law: 
* Tax Law; 
* Public Law; 
* Civil Law. 

Audit Procedures: 
* Budget Law; 
* Quality Standards for Auditing; 
* Audit Plan; 
* Evaluation of Facts; 
* Reporting; 
* International Audit Standards; 
* Cooperation among Audit Institutions; 
* Audit Procedures. 

Advanced CBK: 4th semester; 
General Management II & Master Thesis: 
* Managerial Economics; 
* Competitive Analysis and Strategy; 
* Leadership and Ethics. 

Source: Executive Academy, Vienna University of Economics and Business 
Administration. 

[End of figure] 

Admission Requirements: 

The MBA program is designed not only for auditors from the ACA but 
also for external participants. Applicants must have a university 
degree or several years of professional auditing experience. The 
diversified professional backgrounds and experience of students from 
different international, national, regional, and municipal audit 
institutions, as well as postgraduate students, will have an enriching 
and constructive impact on the program. 

International Orientation: 

The ACA, as the host of INTOSAI's General Secretariat, is very much 
aware of the great professional expertise in government auditing that 
has developed over the years. As the professional organization of 
supreme audit institutions and internationally recognized leader in 
public sector auditing, INTOSAI has issued numerous guidelines on 
financial management and specific fields of auditing. 

The MBA program will provide an excellent forum for a fruitful 
interchange about key issues of auditing, sound financial management, 
and government accountability. Students and lecturers will have an 
opportunity to discuss professional issues and keep abreast of the 
latest developments in the field. Therefore, the curriculum highlights 
comparative analyses of auditing and accounting standards and 
guidelines from different international bodies, including the European 
Union, the International Federation of Accountants, the Institute of 
Internal Auditors, and INTOSAI—whose standards will, in this way, 
enter the academic world. They will become better known and 
recognized, and the benefits of linking practical work and experience 
with academic endeavor should then be apparent to all. 

For additional information, contact the INTOSAI General Secretariat: 

Fax: ++43-1-712-9425: 
E-mail: intosa@rechnungshofgv.at: 
Web site: www.intosa.org: 

[End of section] 

Audit and Civil Society: The Korean Experience: 

By Ho-Bum Pyun, Commissioner, Board of Audit and Inspection of Korea: 

With the development of democracy, citizen awareness of government has 
increased, and citizens have come to actively demand more rights as 
taxpayers. Citizens may express those demands through many different 
types of civic groups, commonly referred to as civil society.[Footnote 
1] Civic groups are exerting a huge influence on societies and 
governments around the globe. They not only monitor various government 
activities but also intervene in government decision making. 
Governments can no longer remain unilaterally supplier-oriented, 
ignoring the wishes of citizens: they must inevitably make public 
services consumer-oriented and responsive to the citizen needs 
expressed by civil society. 

Relationship of Audit and Civil Society: 

A key role of audit is to take a critical view of and monitor 
government activities from a third-party perspective. The activities 
of civil society may also include criticizing/monitoring government 
operations and directly participating in various government activities 
to achieve citizens' objectives. Thus, the two are interrelated and 
similar. 

Both civil society and the audit agency can share and use the results 
of each other's activities. For instance, civil society criticizes 
government based upon SAI audit reports or uses them as a means of 
monitoring. On the other hand, the SAI can use civic groups' 
information and data on the oversight of government. Thus, the SAI may 
view civil society as playing a cooperative and complementary role. 

However, conflicts of interest may arise between the SAI and civil 
society when, for example, civic groups wish to demand a transparent 
conduct of audit on national security issues followed by full 
disclosure of all results, citing the huge amounts of taxpayers' 
moneys that have been spent in this area. Responding to such demands 
greatly increases the possibility of divulging classified national 
defense strategies. 

Furthermore, since an SAI's audit activities are among the categories 
of government activities that civil society criticizes and oversees, 
the relationship between the two can change from being collaborative 
to confrontational. Civil society expects the SAI to carry out its 
responsibilities with a higher degree of transparency than other 
agencies because of its function as an oversight agency. Like any 
other government agency, the SAI may in response take a passive and 
defensive position or try to justify its behavior. 

Civil society sometimes expects the SAI to audit specific areas where 
citizens' interests are strongly affected. As citizens' interest in 
government activities grows, countries around the world commonly 
witness that citizens are expecting not only compliance audits, but 
also performance audits that examine whether government programs and 
projects are conducted in an economical, efficient, and effective 
manner. Accordingly, the scope of audits has been expanded to include 
examining and evaluating the outcomes of government programs and 
projects. 

Furthermore, civic groups may expect that experts in a wide range of 
areas of civil society will be allowed to participate directly or 
indirectly in an SAI's audit activities. Direct participation, 
however, may threaten the SAI's independence, and this issue should be 
approached with due caution and prudence. The SAI should maintain 
independence and neutrality in relation to both auditees and all 
outside influences. 

Indirect participation-—for instance, citizen experts' participation 
in audit planning as advisors-—is highly recommended as it raises the 
SAI's level of expertise, which may not be otherwise sufficient. 
Citizens' wishes and complaints, which may not be fully grasped by the 
audit agency, will also be conveyed appropriately through this channel. 

The BAI's Experience in Partnering with Civil Society: 

The relationship that has been developed between the Board of Audit 
and Inspection (BAI) and civil society in Korea may serve as a useful 
example to other SAIs. The following sections illustrate some of the 
different measures that the BAI has undertaken to satisfy the 
expectations and needs of citizens by introducing various arrangements 
that help to incorporate citizen opinions and input into its audit 
activities. 

Policy Advisory Committee and Advisory Groups: 

The BM has a policy advisory committee, which serves as an advisory 
body for its chairman. The committee comprises experts from all walks 
of life who are active in civic groups. They offer advice on the BAI's 
audit direction or on audit-related policies and communicate concerns 
and suggestions from external parties. Their ideas are purely 
suggestions and have no legally binding force. In addition to the 
policy advisory committee, each of the BM's audit operations bureaus 
has its own advisory group. The groups' members are primarily 
professors or representatives of respected research institutions who 
share their professional knowledge in relation to the BAI's audits. 

Advance Notice Audit System: 

To encourage citizen cooperation and participation, the BM is 
implementing the Advance Notice Audit System to notify citizens in 
advance of the scope and timing of planned audits that may have a 
bearing on their interests. Using this system, the BAI can receive 
citizen complaints or information on poor practices of executive 
government organizations and reflect this information in its audits. 
The BAI receives much of this information through the Internet, which 
is widely used in Korea. 

Citizens' Audit Request System: 

To promote timely and efficient audits and trust in the national audit 
agency, the BAI introduced the Citizens' Audit Request System in July 
2001 in accordance with the provisions of the Anti-Corruption Act. 
Citizens may request audits related to public sector organizations in 
which the violation of laws or corruption could seriously undermine 
the public interest. (Matters related to state secrets, national 
security, criminal investigations, court trials, administration of 
punishment, private legal relationships, and matters currently under 
audit are excluded.) A Citizens Audit Request Screening Committee, 
established within the BAI, decides for or against a request. For 
those requests that are approved, the BAI conducts audits and notifies 
the requesting parties of the results. 

The system has become widely known among the general public, and the 
number of audit requests is increasing. To better respond to the 
demand, the BAI changed the composition of the seven-member screening 
committee from four BAI officials and three outside experts to three 
BAI officials and four outside experts. In addition, an outside expert 
was named to chair the committee. 

Civil Petitions Reception and Citizen Auditor System: 

To address civil petitions that citizens lodge against executive 
government agencies, the BAI has established a Civil Petitions 
Reception function. Civil petitions may be filed with the BAI by 
letter, fax, e-mail, or telephone. The BAI has in place a 24-hour, 
toll-free 188 hotline to receive all allegations of fraud, complaints, 
and civil petitions. About 7,500 reports were filed through the 188 
hotline in 2004. 

Some local governments have introduced a Citizen Auditor System to 
address grievances and complaints filed by citizens. A citizen auditor 
who is not a public official is appointed and serves as an auditor for 
a certain period to review petitions. The citizen auditor conducts 
audits, if necessary, and notifies petitioners of the audit results. 

Disclosure of the Full Text of Audit Reports: 

Previously, the full text of audit reports was not disclosed to the 
public; only a summary report was issued. However, a number of 
citizens, civic groups, and politicians called for full disclosure of 
audit results. In response, the BAI recently decided to issue the full 
text of audit reports to the public. The only exceptions are for 
reports including national secrets and matters that would, if 
disclosed, have a serious, adverse impact on public safety and 
security. 

Oversight of the BAI: 

A strict internal control system is in place within the BAI. The BAI 
inspector general is responsible for internal audit and is authorized 
to monitor the behavior of BAI auditors for violations of the code of 
ethics. The inspector general also examines the private lives of BAI 
auditors to determine whether their actions are open to social 
criticism. 

Nevertheless, civic groups have continued to criticize the 
arrangements for monitoring and overseeing the BAI as inadequate, and 
the need to strengthen transparent internal control has been 
recognized. The BAI plans to institutionalize the appointment of the 
BAI inspector general and chief internal auditors (inspectors general) 
of government agencies from among qualified citizens in the private 
sector. 

Conclusion: 

Active oversight/criticism and participation of citizens and civic 
groups in government activities help to keep government agencies and 
officials on the alert and cognizant of the need to implement policies 
that address citizens' concerns and give due regard to their rights. 
Citizens and civic groups should thus be viewed as a force that 
promotes cooperation between government and civil society, rather than 
a force that seeks to limit and challenge government authority. 
Citizens' oversight of and participation in the activities of an SAI 
will eventually help fortify the cause of audit and contain the abuse 
of audit powers. 

Civil society and the BAI of Korea may serve as a good example for a 
desirable relationship between the SAI and civil society. The BAI has 
sought to develop diverse mechanisms through which the expectations 
and needs of citizens can be met and their opinions can be reflected 
in audit activities. However, participation and oversight of citizens 
in audit activities should not compromise the SAI's independence, 
which is the SAI's core value. 

For additional information, contact the author: 
koreasai@koreasai.go.kr: 

Footnote: 

[1] Civil society encompasses all organizations that are not public or 
for-profit institutions. Such organizations may include universities, 
nongovernmental organizations, environmental movements, indigenous 
peoples' associations, organized local communities, and trade unions. 

[End of section] 

Audit Profile: Office of the Comptroller General of the Bolivarian 
Republic of Venezuela: 

By Clodosbaldo Russian, Comptroller General of the Bolivarian Republic 
of Venezuela: 

In addition to the three traditional branches of government (the 
executive, legislative, and judicial), the Venezuelan Constitution 
established two new branches-—the electoral and the citizens' 
branches. The latter comprises the People's Defender, the Office of 
the General Prosecutor, and the Office of the Comptroller General of 
the Republic (CGR) and exercises its powers through the Republican 
Ethics Council. 

History: 

The Office of the Comptroller General of the Nation was set up in 1938 
by the National Treasury Act. With the constitutional reform of 1947, 
it attained constitutional status, and in the 1961 Constitution its 
name was changed to the Office of the Comptroller General of the 
Republic. In 1975, the first organic law related to the CGR was 
passed; it was amended in 1984, 1995, and 2001, the last amendment 
being made as a result of the approval of the 2000 Constitution. A new 
organic law governing the CGR and the National Fiscal Control System 
was enacted on January 1, 2002; it regulates the functions of the CGR 
and the National Fiscal Control System and public participation in 
performing the audit function. 

Even though the CGR gradually acquired more autonomy throughout its 
history, it gained complete independence and full recognition of its 
auditing powers only after the constitutional reform of 2000. 

Independence and Legal Authority: 

The CGR is not subordinate to any other public entity and enjoys 
operational, administrative, and organizational autonomy. It is under 
the management and responsibility of the Comptroller General of the 
Republic, who is appointed for a term of 7 years. 

To be appointed Comptroller General, a candidate must hold Venezuelan 
nationality by birth and no other nationality; be over 30 years of 
age; be a lay person with a minimum of 15 years experience as a 
graduate in law, economics, public accounting, commercial 
administration, or fiscal sciences; and have at least 10 years' 
experience in a management capacity in public sector auditing 
institutions. 

The Constitution of the Bolivarian Republic of Venezuela grants the 
CGR the legal authority to: 

* control, monitor, and audit transactions related to public revenues, 
expenses, and property without affecting the powers vested in the 
states and municipalities, in accordance with law; 

* control the public debt, without affecting the powers vested in the 
states and municipalities, in accordance with law; 

* inspect and audit public sector organs, entities, and juridical 
persons subject to its control; conduct audits; order investigations 
into irregularities committed against the public patrimony; raise 
objections; and apply administrative penalties, as appropriate, in 
accordance with law; 

* call on the General Prosecutor of the Republic to initiate 
appropriate legal action in response to infractions and crimes 
committed against the public patrimony that it becomes aware of in the 
course of performing its official functions; 

* exercise management control over public sector organs, entities, and 
juridical persons subject to its control and evaluate their compliance 
with (and the results of) public policies and decisions related to 
revenues, expenses, and property; and; 

* carry out any other functions granted by the Constitution and by law. 

In performing its duties, the CGR monitors the legality, accuracy, and 
truthfulness--as well as the effectiveness, economy, efficiency, 
quality, and effect--of the operations and results of the management 
of the institutions and entities within its area of responsibility. In 
performing these functions, the CGR carries out various auditing 
duties, which include valuations, inspection of building works, 
examination of accounts, inspection of accounts, investigations, and 
audits of financial affairs, compliance, and management. 

The CGR's organic law allows for the development of the National 
Fiscal Control System by perfecting auditing mechanisms and creating 
the conditions needed to increase the viability of citizen 
participation in the auditing function. Within the framework of the 
National Fiscal Control System, the CGR is responsible for forming 
policies; issuing regulations, rules, manuals, and instructions 
relating to its auditing functions; and coordinating external and 
internal audits. In addition, the law establishes the CGR as the 
institution responsible for operating the National Fiscal Control 
System; defines the methods to be used for internal audits; and 
establishes the powers to carry out investigations, determine 
liabilities, and impose penalties. Furthermore, the law empowers all 
audit institutions to carry out investigations to verify any acts or 
omissions contrary to law or regulations that could give rise to 
auditing actions. 

The law contemplates the regular filing of sworn statements of assets, 
the right of defense, and an objection procedure. It defines 30 
circumstances giving rise to liabilities, provides for audit 
institutions to impose fines, and gives sole authority to the 
Comptroller General to (1) impose penalties involving suspension from 
office without salary for a maximum of 24 months and (2) dismiss or 
bar persons from public office for a maximum of 15 years. The law 
states that administrative proceedings for determining liability must 
be oral, public, and brief. 

Organizational Structure: 

The CGR has 982 employees (15 management staff, 507 specialized audit 
staff, 375 administrative and support staff, and 85 other workers). 
Its organizational structure comprises a comptroller's and sub-
comptroller's office and general directorates for the following areas: 
technical services, legal services, fiscal control of national public 
powers, fiscal control of the decentralized national administration, 
fiscal control of states and municipalities, and special procedures. 

International Cooperation: 

Since its creation, the CGR has been a member of INTOSAI and OLACEFS, 
to which it provides full collaboration and support. In the past, it 
has been a member of the INTOSAI Governing Board and an auditor of the 
organization. Currently, it is a member of the Governing Board, the 
Finance and Administration Committee, and the Working Group on the 
Audit of International Institutions. It is also on the Governing Board 
of this Journal. In OLACEFS, it has been chairman on two occasions, a 
member of the Governing Council several times, and a deputy auditor. 
At present, it is the chair of the Regional Training Committee and a 
member of the Special Committee for Reviewing the OLACEFS Charter and 
Regulations and the Special Technical Environmental Committee. 

To strengthen relations between institutions and exchange know-how and 
experience, the CGR has signed several international agreements and 
conventions with sister institutions in other countries. 

For further information, contact the CGR: 

Fax: +58-212-508-8604/571-8402: 
E-mail: dgt@cgr.gov.ve; dict@cgr.gov.ve: 
Web site: http://www.cgr.gov.ve: 

[End of section] 

Reports in Print: 

The World Trade Organization (WTO) has published its report, The 
Internationalization of Financial Services—Issues and Lessons for 
Developing Countries. The internationalization of financial services 
is important to strengthening and liberalizing financial systems in 
developing countries. There has been considerable support for the view 
that internationalization can assist countries in building financial 
systems that are more stable and efficient by introducing 
international standards and practices. At the same time, there have 
been concerns about the risks that internationalization may carry for 
some countries, particularly in the absence of adequate regulatory 
structures. This publication examines different aspects of this debate 
and the relative benefits and costs of internationalization; it also 
provides insight into the diversity and significance of the effects of 
internationalization on domestic financial systems. 

To order a copy of this publication, contact: 

WTO Online Book Shop: 
Fax: +41 22 739 57 92: 
Web site: http://onlinebookshop.wto.org/shop. 

Public sector entities and organizations face a wide range of risks 
from external fraud activities. Examples include (1) entities that 
claim grants to which they are not entitled, (2) businesses or 
individuals that operate in the shadow economy and do not declare 
their activities or pay taxes, (3) organizations that collude with 
criminals to defraud the government, and (4) entities that 
systematically exploit weaknesses in government programs. The European 
Federation of Accountants has published a new report, Good Practice in 
Tackling External Fraud, that addresses these risks. According to 
David Delvin, president of the European Federation of Accountants, 
"Public organizations have a responsibility to develop anti-fraud 
policies to show that such fraudulent activities are unacceptable and 
will not be tolerated." The report is divided into three main 
sections: understanding and managing the risks of external
fraud; preventing and deterring external fraud; and detecting and 
investigating fraud and imposing sanctions. Case studies are also 
provided for illustrative purposes. The publication can be downloaded 
from the Federation's Web site (www.fee.be). 

To order a copy of this publication, contact: 

European Federation of Accountants Secretariat: 
Telephone: ++32-2-285-40-85 or ++32-498-112-941: 
E-mail: Sylvie_Romancide@fee.be. 

Countries that belong to the Organisation for Economic Co-operation 
and Development (OECD) have several features in common. They are among 
the richest countries in the world, their economies are market-
oriented, and their citizens enjoy relatively good living conditions. 
At the same time, the individual governments of OECD countries pursue 
different economic, social, and environmental policies. Because of 
these similarities and differences, it is instructive to compare long-
term trends in the economic, social, and environmental phenomena of 
OECD countries. The 2006 OECD FactBook is now available to Journal 
readers. It is the most comprehensive horizontal statistical OECD 
publication. Its purpose is to (1) provide a wide range of users with 
a one-step resource containing comparative, country-based economic, 
social, and environmental data, (2) help users assess the position and 
the performance of a single country by looking at a wide range of 
domains, (3) enhance the visibility of the OECD, and (4) highlight 
measurement issues and underline areas where the comparability of 
statistics across countries is still weak. Another element of this 
year's FactBook is the inclusion of some indicators for key non-OECD 
countries, such as Brazil, China, India, Russia, and South Africa. 
Given the growing importance of these countries in the global economy, 
future editions of the FactBook will continue to include indicators 
for these major global players. 

To order a copy of this publication, contact: 

OECD: 
2, rue Andre Pascal, 
F-75775 Paris Cedex 16, France: 
Telephone: ++33 1.45.24.82.00: 
Fax: ++33 1.45.24.85.00: 
Web site: www.oecd.org. 

[End of section] 

Inside INTOSAI: 

Financial Audit Guidelines Subcommittee: 

Membership Changes: 

Since the last issue of the INTOSAI Journal, some significant changes 
have taken place in the membership of the Financial Audit Guidelines 
Subcommittee (FAS). During 2005, several SAIs and the European Court 
of Auditors (ECA) approached the FAS chair to express their interest 
in joining the subcommittee. The chair felt it necessary to wait until 
the organizational structure and terms of reference for the new 
Professional Standards Committee were finalized before making any 
final decisions. In addition, the chair's aim has been to limit the 
subcommittee to 10 members to allow for active discussions, efficient 
meetings, and high levels of activity between meetings. The Austrian 
SAI decided to step down in favor of ECA. This allowed one more member 
to join, and an offer was extended to another SAI to broaden the 
regional representation. 

Practice Note Task Forces Are Up and Running: 

When the cooperation agreement between the International Auditing and 
Assurance Standards Board (IAASB) and INTOSAI was signed, the IAASB 
had just revised a number of International Standards on Auditing 
(ISA). The subcommittee decided to set up task forces to develop 
practice notes for these ISAs (and for those that were not expected to 
be revised in the near future). Each task force was given the task of 
developing practice notes for two to four ISAs. The first two task 
forces were set up in January 2006 and started their work in February 
2006. Four additional task forces will be formed during 2006 to 
develop practice notes to 11 other ISAs. 

The question of when to translate the practice note and corresponding 
ISA will be discussed at the Professional Standards Steering Committee 
meeting in Washington, D.C., in May 2006. 

The first task forces will develop practice notes for the following 
ISAs: 

Practice Note Task Force 1: International Standard On Quality Control 
1 And ISA 220: 

Experts: Mr. Mike Suffield, United Kingdom; Mr. Robert Tjin Tsoe Jin, 
the Netherlands: 
Back-office experts: Mr. Roy Glass, New Zealand; Mr. Mohammad Heissat, 
Jordan. 

Practice Note Task Force 2: ISA 300, ISA 315, and ISA 330: 

Experts: Ms. Marcia Buchanan, United States; Ms. Vijaya Moorthy, India: 
Back-office experts: Mr. H. Omer Kose, Turkey; Mr. Russel Frith, 
Scotland: 

The timetable for developing practice notes for these ISAs will be a 
maximum of 13 months, including the exposure period. 

Exposure Drafts for Comment: 

The subcommittee recently issued its two first practice notes (for ISA 
230 and ISA 240) for comment by INTOSAI members. Comments were due by 
March 31, 2006. The practice notes and related ISAs, as well as 
information on the format for comments, can be found on the FAS Web 
site. The subcommittee welcomes comments on these drafts from all 
INTOSAI members, other committees, and other parties and will continue 
to expose all newly developed guidance on its Web site. The 
subcommittee will explore additional ways to encourage SAIs to comment 
on the draft practice notes. 

Expanding the Reference Panel: 

In November 2005, a call was sent out to all INTOSAI members asking 
for new nominations of experts to the FAS Reference Panel. The Project 
Secretariat is now following up on the nominations. The Project 
Secretariat is updating its registers based on the responses received 
from many SAIs, and the work of finding suitable experts for the ISA 
and practice note task forces is continuing. 

In March 2006, the Project Secretariat sent out a letter asking SAIs 
to confirm whether the experts who had already been nominated would 
continue to serve or whether the new experts who have been nominated 
would replace them. The Project Secretariat encourages SAIs to 
nominate technically strong candidates who have excellent English 
language skills. 

ISA Task Forces at Work: 

In each issue of the Journal, the Project Secretariat offers a brief 
update on the ongoing work with ISA task forces. The International 
Federation of Accountants (IFAC) Web site (www.ifac.org) provides 
updated information on the IAASB task forces, exposure drafts of ISAs, 
and other related information. 

Work is in progress on the following ISAs where INTOSAI experts are 
involved: 

ISA 230—Documentation: 

Expert: Ms. Kelly Anerud, Norway: 
Back-office experts: Ms. Gail Vallieres, United States; Mr. Inge 
Danielsson, Sweden: 

ISA 701 (ISA 705 and ISA 706)—Modifications To The Auditor's Report: 

Expert: (Vacant): 
Back-office experts: Ms. Marcia Buchanan, United States; Ms. Birgit 
Bach-Nielsen, Denmark: 

ISA 260—Communications With Those Charged With Governance: 

Expert: Ms. Tove Myklebust, Norway: 
Back-office experts: Mr. Filip Cassel, Sweden; Ms. Gail Vallieres, 
United States: 

ISA 800 (ISA 701 and 800) Auditor's report On Special Purpose Audit 
Engagements: 

Expert: Mr. Jonas Hillstrom, Sweden: 
Back-office experts: Mr. Demsash Betemariam, Ethiopia; Mr. Martin 
Dees, the Netherlands; Mr. Robert Cox, New Zealand: 

ISA 550—Related Parties: 

Expert: Mr. John Thorpe, United Kingdom: 
Back-office experts: Ms. Zainun Taib, Malaysia; Mr. Uwe Schreiner, 
Germany: 

ISA 580—Management Representation: 

Expert: Ms. Vijaya Moorthy, India: 
Back-office experts: Mr. Martin Garrido, Chile; Mr. Ennio Colasanti, 
Italy: 

ISA 620—Using The Work Of An Expert: 

Expert: Mr. Claudio Branco, Brazil: 
Back-office experts: Mr. Andris Morvay, Hungary; Ms. Monica Besetsa, 
Lesotho: 

ISA ON Material Weaknesses In Internal Controls (Number to be 
assigned): 

Expert: Mr. Mohammad F Bajhatt, Saudi Arabia: 
Back-office Experts: (Vacant); Mr. Filip Cassel, Sweden: 

The subcommittee is also charged with developing practice notes for 
each ISA to provide additional guidance that auditors in the public 
sector may need to apply to the ISA. The practice notes will be based 
on the contributions of the audit experts from the reference panel. 

Other Ongoing Activities: 

The Project Secretariat is reviewing all the terms of reference for 
experts and other process-related documents to ensure that they are 
aligned and structured in a similar way. The memorandum of 
understanding between INTOSAI and the IAASB will be reviewed before 
the summer to reflect the new INTOSAI structure. At the end of 
February, the FAS provided the IAASB with comments on the proposed and 
redrafted ISA 240, ISA 300, ISA 315, and ISA 330. These comments will 
be displayed on the FAS Web site. 

Meetings: 

The subcommittee meets twice a year and has two additional meetings by 
telephone conference call for the whole group. The telephone 
conference calls allow the Project Secretariat to inform subcommittee 
members of ongoing activities and plans, while the face-to-face 
meetings focus more on discussing different issues, agreeing on ways 
to move forward, and approving different documents. 

In December 2005, the subcommittee held a telephone conference call, 
and on March 23-14, 2006, it held a meeting in Namibia, hosted by the 
Office of the Auditor General of Namibia. In September 2006, the 
subcommittee will meet in New York. This meeting will be sponsored by 
the IAASB. 

Funding: 

The Project Secretariat is constantly seeking new sources of funding. 
As announced in the January 2006 Journal, the IAASB has offered to 
cover the traveling cost for the INTOSAI experts participating in 
IAASB task force meetings. This offer was effective January 1, 2006, 
and will be reconsidered annually. The offer recognizes the important 
role of INTOSAI experts in developing the ISAs and provides an 
opportunity for more SAIs to nominate experts to participate in IAASB 
task force meetings. The Project Secretariat has sent specific 
information about this to all INTOSAI members. 

FAS Web site: 

The new FAS Web site (http://psc.rigsrevisionen.dk/ftn) provides 
current information on the work on the guidelines, exposure drafts on 
practice notes for comment, meeting agendas, approved minutes from 
subcommittee meetings, and much more. 

For additional information, contact the FAS Project Secretariat in 
Stockholm, Sweden: 

Fax: ++46-8-5171 4111: 
E-mail: projectsecretariat@riksrevisionen.se: 

Subcommittee on Internal Control Standards: 

In February 2006, a task force of delegates from the Professional 
Standards Committee's Subcommittee on Internal Control Standards met 
in Brussels. The meeting focused on deliberations concerning the 
amplification and further elaboration of the updated Guidelines for 
Internal Control Standards for the Public Sector that were approved at 
the 18th INCOSAI. The task force—which included members from the SAIs 
of Bangladesh, Belgium, France, Hungary, Lithuania, the Netherlands, 
Oman, Romania, Ukraine, the United Kingdom, and the United States—
worked in two groups. 

The SAI of the United Kingdom (NAO) coordinated the activities of the 
group considering the further elaboration of the guidelines, and the 
SAI of the United States (GAO) coordinated the activities of the group 
deliberating their amplification. To facilitate the task force's work, 
the SAIs of the United States and the United Kingdom had prepared and 
disseminated discussion papers on their respective tasks in January. 
During the first part of the meeting, the two groups held separate 
meetings to discuss their respective issues. In a subsequent session, 
the groups presented the results of their discussions to the plenary 
task force, which agreed on a number of proposals that were sent to 
the full subcommittee for comment. The proposals are summarized below. 

Regarding elaboration of the guidelines, the task force proposed that 
a supplement to INTOSAI's Guidelines for Internal Control Standards 
for the Public Sector be developed to explain the relationship between 
the guidelines and the Committee on Sponsoring Organizations of the 
Treadway Commission (COSO) Enterprise Risk Management (ERM) framework. 
A number of countries are moving toward risk management
implementation based on the ERM model, and the task force agreed that 
by providing a high-level overview of the key features of the ERM 
model with links to the relevant detailed guidance, the supplement 
would help both public management and SAIs understand and apply the 
ERM framework. The NAO will coordinate the activities related to this 
supplement. 

Regarding amplification of the internal control guidelines, the task 
force believes it is absolutely essential that tools be developed to 
promote the implementation and audit of internal controls. With this 
aim in mind, the task force proposed that a working group survey all 
SAIs regarding the following: 

* the status and context of internal controls in their countries' 
public sector, 

* the internal controls in place (SAIs will be asked to submit one or 
two examples of tools available in their countries and identify 
initiatives to implement the guidelines), and, 

* the internal control tools needed. 

The survey responses will be evaluated and used by the task force to 
develop an internal control "toolkit" for public managers and SAIs. 
GAO will develop the survey questions and evaluate the replies. The 
task force also proposed amending the brochure Internal Control: 
Providing a Foundation for Accountability in Government after the 
toolkit is developed. 

In addition, the task force suggested surveying INTOSAI members on 
governance issues, including (1) the difficulty of reporting on the 
effectiveness of internal controls, (2) the involvement of independent 
members at board level, (3) audit committees, and (4) the role of 
internal audit. This information will be incorporated into a paper 
highlighting best practices. In the interim, the subcommittee is 
considering upgrading INTOSAI's Web site by adding links to other 
professional audit organization Web sites that currently address best 
practices. 

The two surveys discussed above (internal control tools and 
governance) will be incorporated into one survey that the SAI of 
Belgium will send to all INTOSAI members. 

Milestones for completing the tasks identified at the meeting were 
established. The subcommittee's goals are to complete the supplement 
to the existing guidelines, the combined survey, and a first 
evaluation of the survey results before the next meeting of the 
subcommittee (in the Sultanate of Oman in January 2007) and finalize 
the internal control toolkit before the 19th INCOSAI in Mexico in 
2007. If these time frames are met, both the supplement and toolkit 
may be approved at the 19th INCOSAI. The subcommittee plans to 
complete the best practices paper on governance frameworks after the 
next INCOSAI. 

For additional information, contact the subcommittee chair, the Senior 
President of the Belgian Court of Audit: 

Fax: ++32 (2) 551 86 22: 
E-mail: InternalConftol@ccrek.be: 

Subcommittee on Performance Audit: 

The INTOSAI strategic plan approved at the 18th INCOSAI in Budapest 
called for the creation of the Professional Standards Committee (PSC), 
which encompassed the former Committees on Accounting and Reporting, 
Auditing Standards, and Internal Control Standards. In September 2005, 
the PSC had its first steering committee meeting in Oslo. On that 
occasion, the steering committee established a Subcommittee on 
Performance Audit and nominated the Brazilian Court of Audit as its 
chair. 

At its meeting in November 2005, the INTOSAI Governing Board approved 
the terms of reference for the PSC. According to those terms, the PSC 
comprises the Subcommittees on Financial Audit Guidelines, Compliance 
Audit, SAI Independence, Internal Control Standards, Accounting and 
Reporting, and Performance Audit. 

A primary task for the Subcommittee on Performance Audit will be 
disseminating the INTOSAI Implementation Guidelines for Performance 
Auditing and developing standards and guidelines concerning 
performance auditing. 

Currently, the membership of the Subcommittee on Performance Audit is 
being determined. Minister Adylson Motta (the chair of the 
Subcommittee and President of the Brazilian Court of Audit) and Mr. 
Henrik Otbo (the chair of the Professional Standards Committee and 
Auditor General of Denmark) have asked the presidents of the INTOSAI 
regional groups to appoint one SAI to represent each region on the
subcommittee. They have also invited 11 other SAIs and the European 
Court of Audit to become members. 

For additional information, contact the subcommittee chair: 

Fax: ++55 (61) 3316 - 7522: 
E-mail: MIN-AM@tcu.gov.br, arint@tcu.gov.br: 

Task Force on the Audit of International Institutions: 

The INTOSAI Task Force on the Audit of International Institutions was 
established at the 18th INCOSAI in Budapest to: 

* coordinate and assist in identifying international institutions that 
(1) should have SAIs as their external auditors and (2) need to 
develop auditing arrangements in line with best audit arrangements, 

* cooperate with concerned SAIs in promoting to relevant international 
institutions and authorities the principles approved at the 18th 
INCOSAI with the aim of changing the audit arrangements, and, 

* promote SAIs as external auditors and assist interested SAIs in 
preparing for such assignments. 

In light of these duties, the task force is forwarding to the INTOSAI 
regions a letter for distribution to all SAIs during the spring of 
2006. The letter will inform SAIs of the INTOSAI principles for best 
audit arrangements for international institutions and invite the SAIs 
to inform their relevant ministries/agencies about the principles. The 
goal of this activity is to increase government awareness of the 
requirements for audits of international institutions and help 
standardize and improve those audits. 

Any SAI that does not receive the task force letter during the spring 
of 2006 should contact Mr. Bjoern Olsen, deputy chair of the 
Professional Standards Committee: 

E-mail: bjoern.olsen@rigsrevisionen.dk: 
Telephone: ++ 45 33 92 83 80: 

Working Group on Environmental Auditing: 

Participants at the meeting sat in awe as they watched and listened to 
a special videotaped message from the two crew members aboard the 
International Space Station, William McArthur and Valery Tokarev: 

"Looking at the Earth from space, we have the opportunity not only to 
see how beautiful our planet is but also to detect and warn about the 
wounds incurred to the earth as a result of mankind's rash activities. 
Your work is very important and useful for people." 

It was a thrilling end to the opening morning of what turned out to be 
the most well-attended and successful meeting in the history of the 
INTOSAI Working Group on Environmental Auditing (WGEA)-—its 10th 
meeting, held in Moscow, the Russian Federation, October 27–November 
1, 2005. The meeting was organized by the Office of the Auditor 
General of Canada and hosted by the Accounts Chamber of the Russian 
Federation. The 124 participants, from 62 supreme audit institutions, 
benefited from the expert presentations, interactive workshops, small 
group discussions, and networking that took place. 

Building Awareness of Environmental Issues: 

Enhancing participants' knowledge of environmental issues was a major 
goal of the meeting. To achieve this end, the meeting featured 
speeches by renowned experts on biological diversity (Mr. Hamdallah 
Zedan, Executive Secretary, Secretariat of the Convention on 
Biological Diversity), climate change (Mr. Feng Gao, Coordinator, 
Implementation Programme of the United Nations Framework Convention on 
Climate Change), and the recently released United Nations Millennium 
Ecosystem Assessment (Dr. Marcus Lee, Program Office for Land, 
Division of Early Warning and Assessment, the United Nations 
Environment Programme). The assessment, with contributions from over 
1,000 scientists around the world, describes the alarming 
deterioration of global and regional ecosystems as well as the 
consequences for economic development and human prosperity. As noted 
by Dr. Lee, the assessment concluded, 

"Human activity is putting such a strain on the natural functions of 
the Earth that the ability of the planet's ecosystems to sustain 
future generations can no longer be taken for granted." 

Exchanging Experiences and Building Capacity: 

Another major goal of the meeting was exchanging experiences and 
building capacity within SAIs to undertake environmental audits. In 
the keynote address to the meeting, Ms. Carman Lapointe-Young, Auditor 
General of the World Bank, strongly endorsed the role and work of SAIs 
as an important part of global environmental governance. She stressed 
in particular the need to focus on significant risks, including 
environmental risks, during audit work. Mr. Christian Averous, Head of 
the Environmental Performance and Information Division of the 
Organization for Economic Co-operation and Development, outlined the 
process and methods used in undertaking country environmental reviews 
and their similarities to auditing practices. 

To facilitate information exchange, the meeting featured four 
interactive workshops and numerous presentations by SAIs organized 
around the following themes: 

* biological diversity (Austria, the Czech Republic, Macedonia, 
Mongolia, Paraguay, and the Russian Federation); 

* climate change (Australia, Canada, Estonia, the Netherlands, and the 
United States); 

* facing the challenges (Denmark, Indonesia, Kenya, Libya, the Russian 
Federation, Turkey, and Ukraine); and; 

* increasing the effect of environmental audits (India, Korea, Norway, 
Russian Federation, the United Kingdom, and the United States). 

These presentations demonstrated that through financial, regularity, 
and performance audits, SAIs around the world are examining their 
governments' management of environmental issues, funds, and programs. 
Moreover, it is clear that such audits are having a significant effect 
in their countries. For instance, environmental audits have led to the 
following results: 

* new legislation and better enforcement of existing regulations; 

* enhanced protection of national parks, wetlands, marine and 
freshwater ecosystems, forests, and ocean resources; 

* improved compliance with international and regional environmental 
treaties; 

* strengthened handling of municipal and hospital wastes; and; 

* improved targeting of public funds for environmental protection. 

WGEA Projects Will Provide More Help for SAIs: 

A third major goal of the meeting was discussing and contributing to 
the many projects under way as part of the working group's 2005-2007 
work plan. To this end, the meeting featured several working sessions, 
small group discussions, and project updates. These projects include: 

* guidance on auditing biological diversity, 

* tips and examples for undertaking cooperative audits, 

* guidance on the evolution of and trends in environmental auditing, 

* explorations of SAI experiences related to the World Summit on 
Sustainable Development, 

* tools to keep the former WGEA themes of water and waste management 
"alive," 

* the fifth survey on environmental auditing, 

* enhancements to the WGEA Web site, and, 

* improved communications with SAIs and international organizations. 

What Participants Said: 

At the conclusion of the workshops, participants shared what they had 
learned during the course of the meeting. Selected comments follow: 

"We have a great responsibility and opportunity to push our 
governments to ensure they stop dangerous trends in [the] environment." 

"The conference opened our eyes about how we are doing things in 
comparison to other SAIs. It will help us to address the most 
important programs of government, to make the best use of resources, 
and to employ the most efficient communication." 

"An important first step in doing audits is training auditors on the 
environment using the WGEA/IDI training course. Then, environmental 
aspects can be introduced as part of larger audits that are not 
environment-only." 

"Parallel or coordinated audits are a great way to build capacity, 
share audit practices, and learn from one another. Plus, we can audit 
larger issues that way." 

"If we humans continue to live recklessly, we shall bequeath a 
lifeless and a more dangerous planet to our children. We should embark 
on impact/results-based audits if we want to have our environment 
preserved for future prosperity." 

"We are now convinced of the need to act and are confident in our 
ability to undertake environmental audits." 

For additional information, contact the WGEA Secretariat: 

Fax: ++(613) 941-8286: 

E-mail: environmental auditing@oag-bvg.gc.ca: 
Web site: www.environmental-auditing.org: 

International Relations Network in OLACEFS: 

During the 18th INCOSAI in Budapest, the idea of establishing networks 
among the heads of international relations units in SAIs was set 
forth. It became part of the INTOSAI strategic plan as well as the 
OLACEFS strategic plan. This network has been established within 
OLACEFS. Its first meeting took place in El Salvador during the 
OLACEFS Assembly in June 2005. A second meeting took place in November 
2005 in Lima, Peru, during the 4th EUROSAI-OLACEFS conference. 

One of the first results of the network was the active participation 
of the heads of international relations units in the first annual 
report of OLACEFS (which was highlighted in Inside INTOSAI in the 
January 2006 Journal). This report will be a permanent and reciprocal 
working tool for the OLACEFS SAIs. 

For additional information contact the OLACEFS General Secretariat: 

Fax: ++507 210 43 99: 
E-mail: omarl@contraloria.gob.pa: 
Web site: www.olacefi.org.pa: 

[End of section] 

IDI Update: 
IDI Update keeps you informed of developments in the work and programs 
of the INTOSAI Development Initiative. To find out more about IDI and 
to keep up to date between editions of the Journal, look at the IDI 
website: www.idi.no. 

IDI/EUROSAI Public Debt Audit Program: 

In cooperation with EUROSAI and the INTOSAI Public Debt Committee, IDI 
will run a Russian-language Workshop on Public Debt Auditing for the 
11 countries of the Commonwealth of Independent States and Mongolia 
this year. In February 2006, the SAI of Azerbaijan hosted a design 
meeting for the program. Six IDI training specialists gathered with 
IDI staff and subject matter experts to design a complete set of 
courseware. The 2-week workshop will be held in Kazakhstan in May 
2006, with 30 participants from the above-mentioned countries. 

Graduation of New OLACEFS Training Specialists: 

After the Long Term Regional Training Program was concluded in 
OLACEFS, the heads of the Latin American SAIs were asked to present 
diplomas to their new training specialists on behalf of IDI. The 
diplomas have been presented, and the OLACEFS region has 29 new IDI-
certified training specialists. 

Global Survey on the Draft IDI Strategic Plan for 2007-2012: 

During November 2005, IDI distributed a survey questionnaire regarding 
its new strategic plan to all the SAIs of developing and emerging 
countries. By mid-February 2006, 80 percent of these countries had 
responded to the questionnaire, giving IDI valuable feedback on its 
draft plan. The results of this survey were presented to the IDI Board 
in March 2006. 

IDI/SPASAI Workshop on Dealing with Fraud and Corruption while 
Auditing: 

IDI recently funded a 1-week IDI-SPASAI workshop, Dealing with Fraud 
and Corruption while Auditing. The workshop was delivered in Apia, 
Samoa, from November to December 2005 and was attended by 24 
participants from 11 members of SPASM. Instructors from the SAIs of 
Cook Islands and Tonga trained the participants. The instructors were 
supported by a subject matter expert from the Serious Fraud Office in 
New Zealand. The material presented at the workshop was originally 
designed and developed by ASOSAI and adapted to meet the needs of 
SPASM. 

IDI/ASOSAI Cooperation for Capacity-building: 

As part of the IDI-ASOSAI Cooperation 2005-2006 for building capacity 
in newly established SAIs in the ASOSM region, a joint instructor 
planning meeting was held March 13-24, 2006, in Hanoi, Vietnam. The 
objective of the meeting was to develop structured courseware on audit 
areas identified during two IDI-ASOSAI needs assessment missions 
conducted in October and November 2005 for the Mekong—South Asian and 
Central—East Asian subregions, respectively. One set of course 
materials will be developed in Russian for delivery in Ulaanbaatar, 
Mongolia, during July—August 2006 to participants from Central and 
East Asian SAIs. The courseware in English is scheduled for delivery 
in 2007 to participants from the Mekong—South Asian region. 

IDI/CREFIAF Regional Workshop on Performance Auditing: 

The second phase of the Long Term Regional Training Program for 
CREFIAF (Sub-Saharan Francophone SAIs) will be completed with the 
delivery of the Regional Workshop on Performance Auditing, which will 
be held in Cameroon at the end of April 2006. 

Contacting IDI: 

To discuss any of the issues raised in this edition of IDI Update, 
contact IDI: 

Telephone: ++47 21 54 08 10: 
E-mail: idi@idi.no: 
Web site: www.idi.no: 

[End of section] 

INTOSAI 2006-2007 Events: 

April 4-5: 
Task Force on the Audit of International Institutions, Venezuela. 

May 4-5: 
Professional Standards Steering Committee meeting, Washington, D.C., 
United States. 

May 22-26: 
SPASAI Congress, Saipan, Northern Mariana Islands. 

May 23-26: 
Committee on IT Audit, Brasilia, Brazil. 

June 20: 
International Tsunami/Disaster Relief Conference, Vienna, Austria. 

June 26: 
Environmental Audit Steering Committee, Yogyakarta, Indonesia. 

June 29-30: 
14th EUROSAI Training Committee meeting, European Court of Auditors, 
Luxembourg. 

September 4-5: 
Professional Standards Steering Committee meeting, Cameroon. 

September 11: 
31st EUROSAI Governing Board meeting, Reykjavik, Iceland. 

September 11-15: 
ASOSAI Assembly, Shanghai, China. 

October	16-19: 
CAROSAI Congress, Freeport, Bahamas. 

November 1-4: 
55th INTOSAI Governing Board, Mexico City, Mexico. 

November 27-29: 
IV Meeting of the EUROSAI Working Group on IT, Bratislava, Slovak 
Republic. 

Editor's Note: This calendar is published in support of INTOSAI's 
communications strategy and as a way of helping INTOSAI members plan 
and coordinate schedules. Included in this regular Journal feature 
will be INTOSAI-wide events and regionwide events such as congresses, 
general assemblies, and board meetings. Because of limited space, the 
many training courses and other professional meetings offered by the 
regions cannot be included. For additional information, contact the 
Secretary General of each regional working group. 

[End of section] 

[End of April 2006 Journal]