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INTOSAI International Journal Of Government Auditing: 

October 2005: 
Volume 32, No. 4: 

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): 
Michael C.G. Paynter (CAROSAI-Trinidad and Tobago): 
EUROSAI General Secretariat (Spain): 
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: 
Leopold A.J. Quedraogo, 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: 
Nobuaki Morishita, President, Board of Audit, Japan: 
Yun-Churl Jeon, Chairman, Board of Audit and Inspection, Korea: 
Juan Gutiérrez Herrera, President, Consejo Superior de la 
Contraloría General, Nicaragua: 
Bjarne Mørk-Eidem, Auditor General, Riksrevisjonen, Norway: 
Alfredo José de Sousa, 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: 

Editorial: 

Focus: INTOSAI Strategic Plan: 

News in Brief: 

System-based Auditing: 

EUROSAI Congress: 

IDI Focus Group: 

Audit Profile: Sri Lanka: 

Reports in Print: 

Inside INTOSAI: 

IDI Update: 

INTOSAI 2005-2006 Events: 

[End of section] 

Editorial: 

The Establishment Of The INTOSAI Professional Standards Committee: 

[Photograph: Henrik Otbo, Auditor General of Denmark and Chairman, 
Professional Standards Committee] 

I am very honored and delighted to write this editorial. It is an 
excellent opportunity to highlight some of the tasks planned by the 
Professional Standards Committee (PSC) and to outline how the 
committee will function in the coming years. 

The INTOSAI Strategic Plan adopted by INCOSAI XVIII called for the 
creation of a Professional Standards Committee to encompass and build 
on the work of the current Committee on Accounting and Reporting, 
Committee on Auditing Standards, and Internal Control Standards 
Committee, which now become subcommittees of the PSC. 

At the extraordinary INTOSAI Governing Board meeting in Budapest on 
March 18, 2005, board members elected me PSC Chairman. The Governing
Board decided that the PSC should draw up terms of reference to be 
presented for approval at the 54th Governing Board meeting in Vienna 
on November 11, 2005. 

In cooperation with the PSC subcommittee chairs, the PSC members, the 
Goal 1 Liaison, the Chairman of the INTOSAI Governing Board, and the 
Secretary General of INTOSAI, the National Audit Office of Denmark 
drafted terms of reference for the PSC. The draft terms of reference 
were discussed at the first meeting of the PSC Steering Committee, 
which was held in Oslo, September 7-8, 2005. At this meeting, the 
Steering Committee also discussed timetables, milestones, and 
products/outputs for the PSC and its subcommittees until the 2007 
INTOSAI Congress in Mexico. According to the proposed terms of 
reference, the PS C's Chair, Steering Committee, and subcommittees 
will work in close cooperation. 

The PSC Steering Committee consists of the PSC chair, the subcommittee 
chairs, a representative nominated by each INTOSAI region (AFROSAI, 
ARABOSAI, ASOSAI, CAROSAI, EUROSAI, OLACEFS, and SPASAI), the Goal 1 
Liaison, the Chairman of the Capacity Building Committee, and two 
observers from the International Federation of Accountants. The 
Steering Committee is expected to meet annually or semiannually. Its 
next meeting will take place in Washington, D.C., May 4-5, 2006. 

The PSC currently comprises the following subcommittees (the chair is 
indicated in parentheses): 

* Financial Audit Guidelines (Sweden). 

* Compliance Audit (Norway). 

* SAI Independence (Canada). 

* Internal Control Standards (Belgium). 

* Accounting and Reporting (USA). 

The creation of a Performance Audit subcommittee is under consideration.
The PSC Chair will consult, as appropriate, with the Chairman of the 
INTOSAI Governing Board, the Secretary General of INTOSAI, the 
Director of Strategic Planning (who is to be appointed in November 
2005), and the Goal 1 Liaison to help ensure that PSC plans and 
activities are generally aligned with the overall strategic plan. 

PSC Tasks in the Coming Years: 

As it begins its work, the PSC recognizes the excellent and pioneering 
work of INTOSAI regional working groups, committees, working groups, 
and task forces, which has contributed to the development and 
implementation of professional standards and guidelines. The PSC will 
work in close cooperation with INTOSAI bodies and build on their 
successes. It is also important to stress the established informal 
links within the INTOSAI community. The continued development and 
implementation of professional standards can and will be carried out 
only with the ongoing and extensive involvement of member SAIs in the 
work. 

In light of the mandate outlined in the INTOSAI strategic plan, one of 
the PSC's main tasks will be coordinating and developing professional 
standards with due consideration to the needs and strategic issues 
facing SAIs in the 21st century. 

SAIs must be able to adapt and respond to the changing demands of 
public audit and governance that result from changes and developments 
in the public sector. Given this dynamic and increasingly complex 
environment, it is crucial that SAIs work continuously to improve and 
develop professional standards, audit products, and audit processes. 

In the planning and coordinating phase, the PSC Chair will focus on 
keeping the PSC aligned with the INTOSAI strategic plan, goal 1, and 
the requirements and needs of INTOSAI members. During this phase, it 
is important to (1) prioritize standards and guidelines for financial 
audit, compliance audit, performance audit, and accounting and (2) 
keep these standards and guidelines up to date with developments in 
the public sector. It is also important to be aware of how needs and 
requirements may vary in different regions and auditing systems. 
Professional standards should address core work practices related to 
public audit and governance. The PSC Chair will be careful to address 
these considerations by coordinating with other INTOSAI bodies and 
external organizations. 

The PSC will work to incorporate existing and new INTOSAI standards 
and guidelines into a common professional standards framework that 
will be more operational and coordinated. This will help disseminate 
knowledge about standards and guidelines and facilitate their 
practical use within the INTOSAI community and governments in general. 

The PSC will facilitate knowledge sharing on professional standards 
both internally and externally by using modern communications 
technology in accordance with the soon-to-be-adopted INTOSAI 
Communications Policy. 

Every third year, the PSC intends to survey SAIs on issues that 
require INTOSAI standards and guidelines in order to be ready to 
launch new projects. These surveys will also be used to measure the 
achievement of PSC strategic goals and tasks identified in goal 1 of 
the strategic plan. 

Accountability and Transparency: 

According to the INTOSAI strategic plan, one of the PSC's tasks is to 
improve SAIs' accountability and transparency by (1) developing a code 
for SAIs to adapt and apply, as appropriate, and (2) identifying and 
publicizing best practices in this area. A major challenge for all 
SAIs is to promote a better understanding of their roles, tasks, and 
responsibilities and improve communication and dialogue with 
governments. The PSC will prepare a document on transparency practices 
and general statements that each SAI can consider in relation to its 
mandate. 

Concluding Remarks: 

The PSC's first important task was preparing the draft terms of 
reference for approval at the upcoming 54th INTOSAI Governing Board 
meeting in Vienna. I was very satisfied with the results of the PSC 
Steering Committee's Oslo meeting, which was part of this preparation. 

Finally, I would like to assure all INTOSAI members that the PSC will 
do its very best to achieve the targets and carry out the intentions 
of the INTOSAI strategic plan. In doing so, the PSC will communicate 
and cooperate with other strategic goal areas and INTOSAI bodies so 
that together we can promote the development and adoption of 
appropriate and effective professional standards. For additional 
information about the PSC, contact: yvan.pedersen@rigsrevisionen.dk. 

[End of section] 

Focus: INTOSAI Strategic Plan: Building On The Past, Creating The 
Future: 

[Editor's note: The editorial in the July 2005 Journal introduced a 
new feature that highlights information about INTOSAI's strategic 
plan. "FOCUS: INTOSAI Strategic Plan" will appear regularly in the 
Journal to inform INTOSAI members and other interested parties about 
progress in implementing the strategic plan that was adopted at the 
Budapest Congress in October 2004.] 

INTOSAI is making significant progress in implementing its strategic 
plan. Events and activities that have occurred since the July issue of 
the Journal are summarized below. 

* The Governing Board's Finance and Administration Committee held its 
second meeting in Washington, D.C., on July 25. The committee 
discussed a number of implementation issues that will be forwarded to 
the board for further deliberation and decision at its November 2005 
meeting. These issues include the following: 

- Director of Strategic Planning: The committee reviewed the 
applications submitted to the General Secretariat for this new INTOSAI 
position and forwarded to the Governing Board its recommendation of 
three candidates to interview. The committee stressed the importance 
of candidates' working experience in SAIs and noted its willingness to 
interview one or more candidates if the Secretary General or the 
Chairman of the Governing Board so desires. 

[Photograph: Members of the Governing Board's Finance and 
Administration Committee at its July 2005 meeting in Washington, D.C.] 

- INTOSAI Interaction with Donor Organizations: The committee chairman 
stressed the importance of INTOSAI presenting a clear and coherent 
plan for dealing with global donors. In that regard, the committee 
recommended that INTOSAI's enterprisewide relations with global donors 
be coordinated centrally and in advance within INTOSAI's Governing 
Board and General Secretariat and with input from the Finance and 
Administration Committee. While INTOSAI's regional working groups will 
retain autonomy in dealing with regional donors (e.g., regional 
development banks), the committee noted the benefits to be derived 
from regional working groups sharing information on donor relations 
centrally and with other regional working groups. The committee will 
query INTOSAI's central bodies (the Secretariat, the Journal, IDI, 
committees, working groups, and task forces) to identify current or 
planned interaction with donors. 

- Associate Membership: The committee will draft an initial list of 
international accountability organizations, including international 
public accounting firms in the private sector, which are potentially 
eligible for associate membership in INTOSAI and will circulate the 
list to the Governing Board for review. 

- Budget Allocations: The committee recommended that the savings 
gained by reducing INTOSAI's annual allocation to the Journal (from 35 
percent of the overall INTOSAI budget to 25 percent) be reallocated to 
capacity-building and knowledge-sharing activities in support of the 
strategic plan (goals 2 and 3, respectively). 

- Global Communications Policy and INTOSAI Collaboration Tool: The SAI 
of India briefed the committee on a draft INTOSAI global 
communications policy. The committee felt the need for more time to 
reflect on the proposal and to provide an opportunity for the Director 
of Strategic Planning (once that position is filled) to carefully 
consider the proposal. The SAI of India also presented a comprehensive 
proposal to develop an Internet-based collaboration tool consistent 
with goal 3 in the strategic plan. The committee decided that it would 
be best for INTOSAI to adopt a phased approach to developing and 
implementing such a tool. 

* The newly created Professional Standards Committee held its 
inaugural meeting in Oslo September 8-9, 2005. For more information, 
see this issue's editorial on page 1 by committee Chairman Henrik 
Otbo, Auditor General of Denmark. 

[Photograph: Members of the Professional Standards Committee at their 
September 2005 meeting in Oslo] 

* The Chairman of the newly created Capacity Building Committee (goal 
2), Dr. Ahmed El-Midaoui of Morocco, drafted the terms of reference 
for the committee and circulated the draft to various SAIs. The terms 
of reference will be revised based on comments received, and it will 
be presented to the Governing Board for approval in November. 

* The INTOSAI Development Initiative (IDI) held a strategic planning 
focus group meeting in Oslo in June to help chart IDI's strategic plan 
and to explore how IDI can best support the INTOSAI strategic plan 
and, in particular, the Capacity Building Committee. For more 
information, see this issue's coverage of the meeting on page 19. 

* The January 2006 issue of the Journal will report on the results of 
the November 10-11, 2005, meeting of the Governing Board. 

[End of section] 

News in Brief: 

Australia: 

National Audit Office's Work Program: 

The Australia National Audit Office's (ANAO) Audit Work Program for 
20052006 includes an ongoing and integrated approach to planning its 
financial statement and performance audits. This integration of 
financial and performance audit activities helps ensure that 
identified major audit risks are covered and significant risks are 
addressed. In a resource-constrained environment, the ANAO is 
cognizant of the need to maximize the value and level of audit 
assurance through good planning and risk management. 

In developing the program, the draft was canvassed with the Joint 
Committee of Public Accounts and Audit, a statutory committee of the 
Australian Parliament that determines Parliament's audit priorities 
and advises the Auditor-General of those priorities. The ANAO also 
held discussions with the various public sector agencies and sought 
comments on the draft audit program. In developing the audit program, 
the Auditor-General takes into consideration all comments received. 

This process ensures that the ANAO's audit products and outputs meet 
the needs of the Parliament and public sector bodies, and are in tune 
with the key risks and challenges facing the Australian public sector 
in a rapidly changing world. These risks and challenges are taken into 
account in identifying the key areas the performance audit work 
program will focus on and in evaluating and assessing potential issues 
to be addressed during the course of financial statement audits.
In addition, the audit activity included in the work program was 
planned with regard to: 

* financial materiality, 

* program significance, 

* audit impact (i.e., likely gain from the audit), 

* program visibility as reflected in its national importance or 
political sensitivity, and, 

* extent of recent audit coverage and internal and external program 
review. 

In planning and prioritizing audit coverage, the ANAO also considered 
the need to provide the Parliament with an assurance, over time, of 
the performance of public sector bodies. To achieve this objective, 
audits will address activities of public sector bodies that are less 
material, as well as more significant matters of national importance.
The program is necessarily dynamic and may be altered during the year 
to accommodate changes in priority tasks identified by the ANAO's 
clients, particularly Parliament. The Audit Work Program provides some 
capacity to address these requests, although the Auditor-General 
determines the final audit program. 

Audit Assurance Tool: 

Some 17 major departments in the Australian federal government use the 
SAP application, an integrated software solution developed in Germany, 
as a financial management information system. SAP provides support for 
a wide range of business functions, including both financial and human 
resource management. Understanding and gaining assurance/reliance over 
the internal control environment surrounding SAP is, therefore, 
critical for financial statement and reporting purposes. 

The use of technology offers the opportunity to gain audit assurance 
in an efficient and effective manner. In the latter part of 2004, the 
ANAO identified a set of new SAP audit and assurance tools, called 
Assure, that could greatly assist and enhance audit efforts within SAP 
environments. The tools offer the promise of automating the monitoring 
and assessment of the SAP internal control environment and also claim 
to automatically identify recommendations to correct security and 
control weaknesses. 

The ANAO undertook a desktop evaluation of the tools and
subsequently ran a pilot installation in a major government department 
to assess the tools' potential to meet audit needs. The results of 
these assessments indicated that using the tools would significantly 
benefit the audit efforts of the ANAO. The tools were purchased in 
December 2004 and have now been implemented across some 15 government 
entities. 

The tools comprise three modules: Assure Control, Assure Security, and 
Assure Integrity. 

The Control module monitors SAP configuration controls by assessing 
internal controls against a best practice book of controls and 
automatically identifying and reporting internal control weaknesses. 
The module can also provide notification of changes to internal 
controls. 

The Security module enables users to monitor the adequacy of access 
security by identifying users that have access to sensitive and 
incompatible functions and providing automatic notification when 
access rights change. 

The Integrity module assists in identifying integrity risks and fraud 
by detecting potentially fraudulent transactions, inappropriate use of 
privileged user access, duplicate transactions, and integrity problems 
with master data. 

The ANAO intends to continue to use the Assure tools on future audits 
as their benefits have been and are continuing to be achieved. The 
benefits achieved to date include: 

* reduced effort and cost, 

* increased knowledge base of SAP controls, 

* continuous monitoring of key SAP controls, 

* greater coverage of SAP transactions, 

* reduced substantive testing, and, 

* focus on 100 percent of the transaction population. 

For additional information, contact: ANAO, fax: ++61 (2) 62 03 77 77; 
email: ag1@anao.gov.au; 
Web site: www.anao.gov.au. 

Bangladesh: 

International Visits Promote Bilateral Cooperation: 

In April and May 2005, Asif Ali, Comptroller and Auditor General of 
Bangladesh, visited the SAIs of the United Kingdom (UK) and the United 
States (U.S.), the World Bank, and the United Nations (UN). The 
visits, funded by the World Bank, were designed to provide insights 
into the operations of the entities, explore possibilities for mutual 
cooperation, and share developments in the Office of the
Comptroller and Auditor General (CAG) of Bangladesh. 

Sir John Bourn hosted the visit to the UK National Audit Office and 
shared information on issues related to his SAI's reports and human 
resource development. At the World Bank, Mr. Ali discussed 
accountability issues related to Bangladesh and made several 
presentations on the CAG's experience in improving governance and 
promoting capacity development. He shared information on various 
reform initiatives under way in Bangladesh as well as strategic plans 
for the future. At the U.S. Government Accountability Office, Mr. Ali 
met with Comptroller General David Walker and apprised him of current 
CAG developments. At the UN, Mr. Ali discussed internal audit
structure and strategies with staff of the internal audit division. 

Throughout the visits, the ties of mutual cooperation among the SAIs 
of the UK, the U.S., and Bangladesh were strengthened, as were 
relations with the World Bank and the UN internal audit system. 

For additional information, contact: Office of the Comptroller and 
Auditor General, fax: ++880 (2) 831 26 90; 
email: international@cagbd.org; 
Web site: www.cagbd.org. 

Bhutan: 

In-house Training in IT Auditing: 

Every year from mid-June to the end of July, the Royal Audit Authority 
(RAA) of Bhutan takes a break from auditing and concentrates on the 
professional development of its staff. Most of this time is spent on 
in-house training, which is effective in terms of both content and 
cost and also provides a forum for auditors to share their specialized 
knowledge and skills with others. 

The 2005 in-house training, which began on June 13, focused on 
information technology (IT) auditing and other IT-related areas. Most 
of the sessions were delivered by RAA staff 


who had attended similar trainings abroad. The RAA training specialist 
instructed the presenters in basic training skills before the sessions 
began. 

[Photograph: Group discussions during the IT audit training in Bhutan] 

The 5th Indo-Bhutan Audit Training was held June 20-24 on the topic of 
auditing in an IT environment. These training events grew out of a 
memorandum of understanding signed in December 2001 between the Office 
of the Comptroller and Auditor General of India and the RAA. Mr. V. 
Ravindran, Accountant General, Kerala, and Mr. N.K Sah, Deputy 
Director from the Office of the Comptroller and Audit General of 
India, New Delhi, were the presenters for this year's training. 

This year's training also featured a competition among the audit 
divisions to present a significant audit observation. The event is 
designed to share information and alert auditors about irregularities 
and corruption identified during audit assignments and to equip the 
auditors with countermeasures. Each observation is judged on the 
application of professionalism and tact while conducting an audit. The 
in-house training concluded with the 8th Annual Audit Conference on 
auditing in an IT environment. 

For additional information, contact: Royal Audit Authority, fax: ++975 
2 32 34 91; 
e-mail: raa@druknet.net.bt; 
Web site: www.bhutanaudit.gov.bt. 

Hungary: 

Report on the SAO's 2004 Activities: 

In 2004, the State Audit Office (SAO) of Hungary prepared 70 reports 
and a summary of its activities during the preceding year. National 
Assembly committees dealt with 18 SAO reports and two studies prepared 
by the SAO Research and Development Institute. In its plenary 
sessions, the National Assembly discussed three reports, including the 
annual report of the SAO's activities. 

The SAO's 2004 audit of the government's final account covered 73 
percent of the central budget's main expenditures. The SAO audited 
European Union sources, the planning for domestic cofinancing, and the 
use of resources, together with comprehensive audits of local 
governments having substantial budgets or assets. The SAO also tracked 
the implementation of its former findings and recommendations and the 
audit of measures completed. 

In its summary report on audits completed in 2004, the SAO concluded 
that financial tensions and problems can be handled only temporarily 
and partially without comprehensive and coordinated modernization and 
the renewal of the financial system of major community supply systems. 
To resolve these problems, the original causes must be addressed. The 
ongoing and repeated mistakes the SAO identified point to both 
structural problems and a lack of public discipline. Despite 
widespread authorization and the concentration of considerable 
capacity, external audit cannot resolve weaknesses in managerial 
direction and control that are built into the organization of various 
institutions and agencies. 

In the area of international cooperation, the most outstanding event 
of 2004 was the XVIII INCOSAI held in Budapest, with attendees from 
149 countries and 12 international organizations. The congress agenda 
dealt with issues of great importance for INTOSAI's future development. 

The SAO pays special attention to making its activities transparent to 
the public. Its full reports are available in Hungarian on its 
Internet Web site (www.asz.hu), together with information on the SAO's 
organization and shortened English versions of the reports. 

For additional information, contact: State Audit Office, fax: ++36 (1) 
4849200; 
e-mail: kovacsa@asz.hu; 
Web site: www.asz.hu. 

Israel: 

New State Comptroller and Ombudsman: 

On May 25, 2005, the Knesset (Parliament) elected Justice Micha 
Lindenstrauss to be the State Comptroller and Ombudsman of Israel. He 
took his oath of office at the Knesset on June 29, 2005, and began his 
7-year term on July 4, 2005. 

Prior to his appointment, Justice Lindenstrauss had been the President 
of the District Court of Haifa since1999. He served as chairman of the 
Israeli Association of Judges until July 2005. From 2000 to 2005, he 
chaired the Advisory Committee to the Speaker of the Knesset for 
granting subventions to nonprofit organizations. He also chaired the 
Movement for a Better Israel and the Israeli-American Friendship 
Society. 

[Photograph: Micha Lindenstrauss] 

He represented Israeli judges in the European Association of Judges 
and for over 12 years served on the Board of Directors of the Justice 
for the World Foundation. He is a senior lecturer at the Faculty of 
Law at the University of Haifa. 

Judge Lindenstrauss graduated from the Faculty of Law at the Hebrew 
University of Jerusalem in 1965 as Master of Juris. He is the author 
of several books. He is married and has three daughters. 

For additional information, contact: State Comptroller's Office, fax: 
++972 (2) 666 51 50; 
e-mail: sco@mevaker.gov.il; 
Web site: www.mevaker.gov.il. 

Malta: 

First Midyear Audit Report Issued: 

The Auditor General of Malta is required by law to annually audit the 
public accounts of the government of Malta and report to the House of 
Representatives. This year, for the first time, the National Audit 
Office (NAO) of Malta published a midyear audit report on the public 
accounts for the financial year ended December 31, 2004. This report, 
issued in July 2005, summarized the findings of financial and 
compliance audits of the government of Malta and a number of 
noncentral government organizations that had been completed through 
June 2005. The report highlights issues of current interest and 
reduces the gap between the time the audits are completed during the 
first half of the year and the time the reports are submitted to the 
Parliament. It is intended to complement the annual audit report, 
which will be published towards the end of the year. 

The midyear report focuses on systems audits and issues relating to 
specific government activities apart from the routine financial and 
compliance audit work. Individual write-ups highlight and comment upon 
such systems and issues as data protection compliance, the eco-
contribution system, and the agriculture support scheme account. 
Findings are reported in a standardized format, and recommendations 
and management comments are included. 

The annual audit report will incorporate audits on 2004 public 
accounts carried out during the second half of this year and will 
refer to audit issues included in the midyear report. The annual audit 
report will also include the audit opinion on the 2004 accounts, thus 
completing the whole statutory financial and compliance audit 
reporting cycle for 2005. 

The full midyear report can be found on the NAO Web site 
(www.nao.gov.mt) under Publications. 

For additional information, contact: National Audit Office, fax: ++356 
21 22 07 08; 
e-mail: nao.malta@gov.mt. 

United States: 

Class of 2005 Completes International Auditor Fellowship Program: 

In August 2005, 20 auditors representing 15 countries completed the 
International Auditor Fellowship Program sponsored by the U.S. 
Government Accountability Office (GAO) in Washington, D.C. A
graduation ceremony marked the end of the formal 4-month training 
program. However, 11 fellows stayed on for an additional 6-8 weeks of 
on-the-job experience at GAO headquarters and its Boston field office. 

The fellowship program focuses on accountability, organizational 
transformation, performance audit, and evaluation. Now in its 26th 
year, the program is designed to strengthen the ability of supreme 
audit institutions (SAI) to fulfill their missions and enhance 
accountability and governance worldwide. Graduates take their new 
experiences and learning back to their SAIs and leverage that 
knowledge by sharing it with their colleagues. 

This year's participants represented the audit offices of Albania, 
Bahamas, Bhutan, China, Costa Rica, Greece, India, Indonesia, Kenya, 
Liberia, Oman, Spain, Sri Lanka, Yemen, and Zambia. 

For additional information, contact: GAO, fax: ++(202) 512-4021; 
e-mail: spel@gao.gov; 
Web site: www.gao.gov. 

Uruguay: 

Ninth Meeting of the MERCOSUR SAIs: 

In December 2004, the ninth meeting of the SAIs of MERCOSUR members 
and partners was held in Montevideo; the Court of Accounts of Uruguay 
chaired the meeting. MERCOSUR, the Southern Common Market, was formed 
in 1991 by Argentina, Brazil, Paraguay, and Uruguay; Bolivia and Chile 
are its partner countries. The SAIs of MERCOSUR members and partners 
meet to promote mutual cooperation by exchanging information, sharing 
experiences, and analyzing and proposing mutual cooperation projects 
to strengthen regional public control. 

For additional information, contact: Tribunal de Cuentas de la 
Republica, fax: ++598 (2) 916 75 07; 
e-mail: asint@tcr.gub.uy; 
Web site: www.tcr.gub.uy. 

[End of section] 

System-based Auditing and Monitoring of Government Programs and 
Projects: 

By Bokdong Ha, Board of Audit and Inspection of Korea: 

By faithfully fulfilling its statutory mission of audit and inspection 
over the past 50 years, the Board of Audit and Inspection of Korea 
(BAI) has worked unceasingly as the nation's supreme audit institution 
to ensure accountability and performance in the public sector. As a 
result, it has become a highly regarded government organization. 

In recent years, however, there have been dramatic and widespread 
changes in the audit environment in Korea. The budgets of the BAI's 
auditees increased more than 300 times from 1970 to 2004. While past 
government programs and projects were mostly small in scale and 
relatively limited in scope, today they tend to be large in scale and 
to involve many different government agencies directly or indirectly. 
Furthermore, the demand for the BAI's external audits is increasing. 
In November 2003, the National Assembly made its first request for a 
BAI audit, and the number of popular audit requests is also steadily 
growing. 

As the supreme audit institution, the BAI is expected to quickly 
identify emerging trends in the rapidly changing audit environment and 
to serve as a model organization to advance public administration. 
However, concerns have been raised about the BAI's ability to meet the 
evolving demands of its clientele—the people, the National Assembly, 
and auditees—in the current environment. It has been alleged that the 
BAI has failed to meet new expectations and may have been remiss in 
its efforts to reform its auditing methods and practices. The BAI has 
been criticized for continuing to be a faultfinder that does not pay 
adequate attention to the larger picture and for failing to 
comprehensively and systematically diagnose structural drawbacks in 
government programs and projects, thus not presenting fundamental 
solutions. 

With the launch of the Roh Moo-hyun administration in 2003, ever 
stronger pressure from inside and outside the organization has forced 
the BAI to revamp itself. Outside sources have repeatedly urged the 
BAI to play a consultant role—diagnosing and evaluating government 
services to discover solutions to the problems identified from an 
objective, independent perspective. Meanwhile, insiders have steadily 
argued that the BAI should change its traditional uncoordinated, 
microscopic audit approach to a comprehensive, macroscopic, 
specialized, and scientific approach that will lead to reliable audit 
results. 

After Chairman Yun-Churl Jeon took office in 2003, the BAI stepped up 
to the challenge of coping with the changing times and meeting the 
demands for reform. The BAI has thoroughly analyzed its role and 
function and come up with a new and more efficient system of audit 
management in response to the demands of the age of globalization and 
transparency. This article discusses the BAI's new system-based audit 
concept and the monitoring system for major government programs and 
projects that was introduced to support it. 

System-based Auditing: 

The system-based auditing the BAI has adopted includes comprehensive 
guiding principles for audit operations, including the BM's new 
policy, strategy, and concept of auditing. System-based auditing 
applies to both audit approaches and the subjects of audit. 

As an audit approach, system-based auditing employs a scientific and 
systematic method to identify core problems. This approach contrasts 
with the traditional practice of examining public officials or 
government operations at random and relying heavily on intuition. In 
other words, audit work begins only after key audit points are 
accurately identified by thorough preliminary study and data analysis. 

With regard to the subject of audit, system-based auditing goes beyond 
pointing out individual audit findings. It entails an across-the-board 
examination of the system in question to identify the causes of 
problems and to come up with a fundamental remedy. For example, in the 
case of a credit card scandal, a system-based audit would examine the 
overall financial system, without stopping to point out the known 
problems of financial supervision, in order to reach the root cause 
and recommend how to address it. 

Three Guiding Principles for System-based Auditing: 

The BAI has identified three guiding principles for system-based 
auditing: it focuses on the most strategic and high-risk areas, it is 
performance oriented, and it is proactive. 

First, in selecting what to audit, system-based auditing focuses on 
the most important and high-risk areas to make the most of limited 
audit resources. In this way, system-based auditing addresses the 
areas that have the greatest influence on society. 

Currently, the BAI has less than 1,000 staff members and more than 
65,000 auditees, making it both impossible and inadvisable to try to 
audit the entire audit universe. Therefore, in order to use its 
limited resources to most efficiently audit the major items in the 
budget and large-scale programs and projects, it is necessary to 
employ a strategic audit approach that focuses on core audit points. 
To this end, the BAI sets up 3- and 5-year strategic plans that 
prioritize audit subjects in order of importance and urgency. When 
serious and urgent problems emerge in major government programs and 
projects, the BAI can modify its plans to examine them while keeping 
track of the progress of the other programs and projects. 

Second, from the perspective of audit criteria, system-based audit 
assesses the performance of government operations in terms of the 
three Es (economy, efficiency, and effectiveness) and makes 
recommendations for improvement. 

The role of the government today, unlike in the past, is geared more 
towards promoting and supporting public services than regulating or 
controlling them, and taxpayers are eager to see if their taxes are 
being spent efficiently. Consequently, auditing cannot make a 
difference by focusing on the current disconnected, microscopic audit 
approach that emphasizes compliance. The BAI will place a stronger 
emphasis on performance-oriented auditing that assesses the three Es 
in order to comprehensively analyze and review the performance and 
execution of government programs and projects and to develop measures 
for improvement that are both practical and comprehensive. 

Third, system-based auditing is proactive. It strives to act in 
advance to address anticipated difficulties in order to promote 
entrepreneurship and creativity in the public sector. 

In the past, auditing was often blamed for concentrating on 
faultfinding for its own sake, hampering smooth public administration, 
and nurturing complacency among government officials. In response to 
this criticism, the BAI's new audit efforts will place greater 
emphasis on holding government officials accountable for a job not 
done than for a job badly done in order to encourage the civil service 
to boldly embark on new tasks with creativity. At the same time, best 
practices will be promoted and widely disseminated among the civil 
service so that the BAI's auditing will become positive and future-
oriented. 

Furthermore, system-based audit will not stress uncovering wrongdoing 
in order to punish the perpetrators. Rather, it will emphasize 
improving ineffective institutions and removing environmental and 
structural factors that lead to improprieties, thereby forestalling 
possible recurrences of the problems. 

Monitoring Major Government Programs and Projects: 

The BAI introduced a monitoring system to back up the implementation 
of its new system-based auditing. 

For system-based auditing to successfully take root, auditors need to 
have a thorough knowledge of the workings of government. For example, 
auditors must have ample understanding of the auditees' tasks, 
programs, and projects and keep up to date with their progress. In the 
past, auditors reviewed and analyzed only the programs and projects 
selected to be audited during the assigned audit period. As a result, 
they were poorly positioned to acquire the knowledge and insight that 
were needed. BAI's auditors were often given only about 20 days to 
identify all the problems in government programs and projects and come 
up with recommendations for improvement. 

In addition, even though certain programs and projects were vital to 
the nation as a whole, they were sometimes left unattended for several 
years unless they were selected for audit, and the optimal timing for 
auditing was often missed. In order to remove such problems, the BAI 
devised a monitoring system that systematically addresses the 
connection between auditing and the progress of government programs 
and projects. 

The monitoring system has several functions. First, it reinforces the 
implementation of strategic auditing by helping to concentrate limited 
resources on the most important areas. For instance, using the 
problems identified through monitoring, auditors can prioritize 
auditees in order of importance and the urgency of the problems. 
Government programs and projects are selected for monitoring according 
to the priorities in the 3-year strategic audit plan. In the course of 
monitoring, confusion or conflicts of interest related to the 
implementation of programs or projects may be identified among 
different government agencies. If these issues need to be dealt with 
urgently, the BAI can begin a timely audit and notify government 
authorities of solutions to the problems identified. 

Second, the monitoring system shows whether latent socioeconomic 
issues are reflected in the policy agenda and raises issues as 
necessary. If a matter of public debate is not included in any 
agency's policy agenda due to indifference or the passive posture of 
the government agency in charge, or if a policy needs to be revised 
due to changes in circumstances, monitoring identifies the need for 
appropriate policy actions. 

Third, the monitoring system identifies and promotes best practices in 
the implementation of programs and projects. Through ongoing 
monitoring, best practices are analyzed to identify the key factors of 
success and are communicated broadly to the public sector. 

In January 2004, after in-depth analyses and the systematic 
classification of 1,000 major programs and projects, the BAI selected 
100 for monitoring. These included the president's election pledges 
and directives, departmental initiatives, and 300 major government-
financed projects. Two main selection criteria were the importance of 
the program or project and the risk it posed. Core programs and 
projects, projects with large-scale funding, and projects having 
significant socioeconomic impact and ramifications were given higher 
priority in terms of importance. Programs or projects with complicated 
implementation structures and procedures or those with many interest 
groups or related government agencies were given higher priority in 
terms of risk. 

Three Basic Principles for the Monitoring System: 

First, the monitoring system is operated in close connection with 
auditing. Those programs and projects of importance that are being 
monitored are included in the annual audit plan. If the monitoring 
results reveal serious problems, even those programs or project that 
are not included in the annual audit plan are audited. Other programs 
or projects being monitored will be reflected in the medium-term audit 
plan according to auditing priority and will be audited in 
chronological order. 

Second, if the monitoring results show the need for immediate action 
or improvement, relevant government authorities are notified of the 
problems identified. When there is a conflict of interest among 
different government agencies, resistance from interest groups, or any 
other confusion or setbacks that call for prompt adjustment or remedy, 
the Office for Government Policy Coordination is notified of the 
monitoring results so that it can promote implementation through 
timely actions. 

Third, the BAI regularly follows up on and keeps track of how problems 
identified in the process of monitoring or auditing are redressed. 

Conclusion: 

At this time, it would be premature to assess the effect of the BAI's 
new paradigm for auditing and monitoring system as these efforts are 
still in the early stages. Also, undertaking these changes requires 
the development of a shared commitment and behavioral changes from 
those who work in the institution. Reform is a long and difficult 
journey that bears fruit only if it is pursued continuously based on a 
well-defined vision and strategy. The BAI's initiative will enable it 
to become an advocate of reform and lead by example. These ongoing 
efforts will enable the BAI to maintain the trust and confidence of 
the people that it serves. 

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

[End of section] 

EUROSAI Holds Sixth Triennial Congress in Germany: 

By Kate Brentzel, International Journal of Government Auditing: 

The Audit of Public Revenues by Supreme Audit Institutions (SAI) was 
the central theme at the sixth triennial congress of the European 
Organization of Supreme Audit Institutions (EUROSAI) held May 30—June 
2, 2005, in Bonn, Germany. Dr. Dieter Engels, President of Germany's 
Federal Court of Audit, and his staff welcomed 174 delegates from 44 
countries. Observers from INTOSAI regional groups (AFROSAI, ARABOSAI, 
ASOSAI, and OLACEFS) also attended the conference, along with 
observers from several international organizations and this Journal. 

The opening ceremony was held in the rotunda of the historic 
Steigenberger Grandhotel Petersberg, near Bonn. Dr. Sergey V. 
Stepashin, President of the Accounts Chamber of the Russian Federation 
and outgoing Chairman of EUROSAI, opened the congress with a
warm welcome to the delegates. Dr. Stepashin noted that EUROSAI was 
celebrating its 15th anniversary and that in this short time period 
the organization has become an efficient vehicle for international 
cooperation and for strengthening institutions of independent 
financial control across Europe. He remarked that EUROSAI now includes 
47 members, with the SAIs of the Republic of Macedonia and Kazakhstan 
joining since the last congress. He summarized 3 years of successful 
work by the EUROSAI working groups on environmental audit and 
information technology and by the EUROSAI Training Committee. He also 
highlighted EUROSAI's cooperation with related organizations across 
the globe, such as joint conferences held with OLACEFS, and commented 
on fruitful cooperation between EUROSAI and INTOSAI. 

[Photograph: Sergey Stepashin, President of the Russian Chamber of 
Accounts, hands over the chairmanship of EUROSAI to Dieter Engels, 
President of Germany's Federal Court of Audit] 

Dr. Stepashin handed over the presidency of EUROSAI to Dr. Engels, who 
remarked that international cooperation was indispensable in an 
increasingly integrated Europe. He said that he welcomed the 
"promising and pleasant" challenge of presiding over EUROSAI. Dr 
Engels introduced the technical themes and subthemes of the congress 
and thanked all the theme chairs who had worked so hard to prepare for 
the congress. 

Dr. Engels' remarks were followed by welcoming comments from Dr. 
Wolfgang Zeh, Director of the German Parliament, and several members 
of parliament: Mr. Karl Diller, State Secretary to the Federal 
Minister of Finance; Mr. Manfred Carstens, Chairman of the Budget 
Committee; and Mr. Gerhard Rubenkonig, Chairman of the Public Accounts 
Committee. Mr. Diller presented Dr. Engels with a EUROSAI Congress 
commemorative stamp. 

Technical Theme Presentations: 

The central theme of the congress was the audit of public revenue. It 
was addressed in three subthemes: the significance of public revenues 
for public financial managers and for the legislature's budgetary 
authority (rapporteur: Netherlands), the role of the SAI in the 
budgetary cycle (rapporteur: United Kingdom), and audit approaches and 
audit impact (rapporteur: Poland). The three rapporteurs drafted 
discussion papers on the subthemes, summarizing the findings and 
lessons learned by EUROSAI members. The following paragraphs summarize 
the major conclusions and recommendations made at the congress. 

Subtheme I: The Significance of Public Revenues for Public Financial 
Managers and for the Legislature's Budgetary Authority: 

EUROSAI delegates at the congress reiterated their commitment to the 
1977 Lima Declaration, which calls for tax revenues to be audited as 
extensively as possible. The declaration, which is applicable to all 
public revenues, emphasizes conducting legality and regularity audits 
of the collection of public revenues, the importance of examining the 
efficiency of the system of revenue collection, the need to review the 
achievement of revenue targets, and the importance of proposing 
improvements to legislative bodies. 

The delegates welcomed initiatives by EUROSAI members of European 
working groups to share with other SAIs their audit guidelines on 
specific types of public revenue. The delegates also acknowledged that 
taxes and social contributions are the most important categories of 
public revenue and that although the composition of public revenue is 
quite stable, collection processes are changing rapidly due to new 
legislation, reorganization of tax administrations, and increasing 
automation. Similarly, it was recommended that SAIs pay attention to 
the broader audit context, including the tax culture and public 
willingness to comply with tax requirements. SAIs need to develop a 
strategy for auditing public revenues, including a risk analysis of 
the tax environment in their countries (for example, the complexity of 
tax regulations and the extent of access to tax-related data). 
Overall, the congress advocated conducting a coordinated audit of tax 
subsidies that would be open to all EUROSAI members. 

Subtheme 2: The Role of the SAI in the Budgetary Cycle: 

In subtheme 2, the delegates recognized that parliaments are 
increasingly interested in SAIs playing a larger role in the revenue 
budget process. SAIs are in an excellent position to do so because of 
their independent access to government revenue budget data. However, 
SAIs need to work out their strategy in this regard so that they are 
not drawn into doing too much revenue forecasting, thereby 
compromising their independence. 

It was noted that SAIs' involvement in reviewing budget preparation 
varies widely from country to country. In countries where the SAIs do 
not have an advisory role on revenue budgets, it was recommended that 
the SAIs try to have their mandates expanded. The delegates also 
emphasized the execution of tax legislation in revenue auditing. Some 
audits reveal that the practical impact of such legislation is not 
always in line with legislative objectives. In such cases, the 
shortcomings may result from problematic legislation—for example, 
excessively complex legislation that is difficult to implement. 
Delegates concluded that if the SAI's mandate permits, the SAI should 
use these audit findings to advise legislators by pointing out these 
shortcomings and recommending legislative amendments. 

Subtheme 3: Audit Approaches and Audit Impact: 

The delegates acknowledged that based on their respective mandates, 
SAIs use different methodological approaches to revenue audits. 
Regularity and compliance audits are valuable for identifying 
shortcomings in the revenue legislation, and performance audits are 
useful for encouraging the efficiency of revenue collection and 
monitoring the restructuring processes within tax authorities. 
Combining financial and performance audits may prove especially 
constructive. 

It was recommended that SAIs adapt their audit work to the 
increasingly computerized environment. SAIs must be knowledgeable 
about the information technology (IT) systems used by the tax 
authorities they are auditing. Nationally, SAIs should attempt to 
coordinate with other public bodies responsible for auditing revenues. 
Furthermore, because national economies are becoming increasingly 
interdependent, SAIs may be more effective in doing their work if they 
cooperate with other SAIs; for example, international cooperation is 
particularly useful in the auditing of tax fraud. 

Overall Recommendations: 

After three excellent presentations on each of the subthemes, the 
congress agreed to several overall recommendations. 

* EUROSAI members should reassess their overall strategy for revenue 
audit. 

* A coordinated audit of tax subsidies should be open to all EUROSAI 
members. 

* The EUROSAI IT working group's offer to report on the relevance of 
IT in revenue auditing should be accepted. 

* EUROSAI members should exchange benchmarking information and 
criteria to help them compare the costs and performance of tax 
administrations. 

* EUROSAI members should share their initiatives and relevant 
guidelines on the public revenue theme via the EUROSAI Web site. 

Training Committee: 

Representatives from the co-chairs (Spain and France) of the EUROSAI 
Training Committee presented information on the committee's activities 
over the past 3 years and summarized the training strategy. The 
congress resolved to accept the report, adopt the training strategy 
and operations plans for 2005-2008, renew and confirm the committee's 
mandate, and ask the committee to implement the actions and report on 
them to the governing board. 

Information Technology Working Group: 

Saskia Stuiveling of the Netherlands Court of Audit reported on the 
activities of the Information Technology Working Group, which 
comprises 29 member SAIs. The group completed its first work plan (for 
2002-2005) with outputs in five areas: electronic records management, 
IT self-assessment, e-government, inventory IT training courses, and a 
Web site (www.eurosai-it.org). The working group's 2005-2008 work plan 
was unanimously approved by the delegates. 

Working Group on Environmental Auditing: 

Miroslaw Sekula, of Poland's Supreme Chamber of Control, reported on 
the mission and activities of the Working Group on Environmental 
Auditing. The congress resolved to acknowledge the working group's 
2002-2005 activity report and to extend the group's mandate for 
another 3-year period within its existing organizational framework. 

Other Business: 

Magnus Borge, Director General of the INTOSAI Development Initiative 
(IDI), reported on IDI-EUROSAI cooperation activities. He remarked on 
the success of IDI's Long Term Training Program in the EUROSAI region. 
As a result of the program, EUROSAI has a pool of 67 training 
specialists that both the region and individuals SAIs can use to 
enhance training. 

Faiza Kefi, head of the SAI of Tunisia, proposed that there be closer 
ties between EUROSAI and ARABOSAI. She suggested establishing a 
biennial meeting between the two groups and an exchange program for 
training. 

The congress unanimously accepted the offer of Poland's Supreme 
Chamber of Control to host the seventh EUROSAI congress in Krakow in 
2007. The delegates enjoyed a video presentation on the beautiful city. 

For additional information on the EUROSAI Congress, see the EUROSAI 
Web site (www.eurosai.org), where the congress proceedings will be 
posted in late 2005. 

[End of section] 

Stakeholders Focus on IDI Strategic Plan: 

The INTOSAI Development Initiative (IDI) continued its long-standing 
practice of active engagement with its clients and stakeholders by 
convening a special IDI Strategic Planning Focus Group in Oslo June 27-
29, 2005. The focus group gathered a respected and authoritative group 
of auditors general from the SAIs of developing countries to assist in 
developing the next IDI strategic plan. This article provides a high-
level summary of the discussions that took place during the Oslo 
meeting; additional information about IDI's strategic planning process 
is available from IDI at www.idi.no. 

[Photograph: Participants in the IDI Strategic Planning Focus Group 
held in Oslo in June 2005] 

Participation in the focus group was by invitation only. The IDI 
Strategic Planning Committee identified auditors general known for 
their support of training and capacity building and for personal 
characteristics needed in the focus group. The response was excellent, 
and the following auditors general traveled to Oslo: Mr. Gagic 
Voskanyan, Armenia; Dasho Kunzang Wangdi, Bhutan; Mr. Paul Raui Steven 
Allsworth, Cook Islands; Mr. Bubacarr Sankareh, Gambia; Tan Sri Dr. 
Hadenan A Jalil, Malaysia; Dr. Ahmed El Midaoui, Morocco; H.E. Sayyid 
Abdulla bin Hamad bin Saif Al Busaidy, Oman; Dr. Genaro Matute Mejfa, 
Peru; Ms. Arlette Hyacinth, St. Lucia; Mr. Abdou Bame Gueye, Senegal; 
and Ms. Faiza Kefi, Tunisia. The IDI team led by Director General 
Magnus Borge and facilitators Rick Steele, a Canadian consultant who 
has worked with IDI for many years, and Martin Sinclair, assistant 
auditor general of the U.K. National Audit officer, supported the 
group. 

Bjarne Mork-Eidem, Auditor General of Norway and President of IDI, 
inaugurated the meeting, setting the tone in his welcome to the 
participants by saying, "This is without a doubt one of the key stages 
in the development of IDI's next strategic plan. From the outset we 
have sought ways to involve stakeholders as broadly as possible ... 
and our intention this time is to use your experience and knowledge to 
inform the development of the goals and objectives on which a future 
SAI questionnaire will be based." 

The focus group met at a crucial stage in formulating the draft goals 
and objectives that IDI will incorporate into a questionnaire to be 
sent to SAIs in developing and emerging countries during the final 
quarter of 2005. The questionnaire results will be used to identify 
priority goals and objectives during IDI's next strategic planning 
period, from 2007 onward. The focus group also served as a "check and 
balance" to help ensure that the strategic plan meets the needs of 
SAIs. The focus group provided feedback from SAI stakeholders on how 
IDI can continue to support capacity-building activities, what its 
priorities should be for the future, and whether IDI should change its 
methodologies and working practices. 

Following the inaugural session, participants shared their opinions 
and observations about IDI's work, achievements, and impact and how 
SAI communities in the regions perceive IDI. This discussion provided 
a starting point and foundation for the discussions that followed. 

In response to a list of questions, participants unanimously expressed 
positive opinions of IDI, making it clear that IDI has successfully 
developed a strong training infrastructure in the regions and at the 
same time gained a solid reputation for developing and maintaining 
strong relationships. Participants highlighted the importance of IDI's 
regional approach, emphasizing that while individual SAIs have 
benefited from IDI activities, regions have also developed and 
enhanced their capacities collectively and in this way have been 
strengthened and empowered. 

[Photograph: In small groups, participants discussed issues related to 
IDI's past, present, and future roles] 

All participants agreed that IDI's success has brought with it 
increased expectations. These expectations were expressed during the 
plenary discussion and included (1) developing and strengthening the 
current cadre of training specialists and (2) helping SAIs to adopt 
and implement international standards and develop national strategic 
plans. Peer review was discussed, and it was suggested that IDI might 
find a suitable role in helping SAIs, particularly those in developing 
and emerging nations—to establish processes through which standards 
might be more fully achieved. 

Discussions about IDI's past and present set the stage for discussions 
about its future, specifically the draft IDI strategic plan for 2007 
onward. Participants discussed the draft IDI vision and mission and 
compared it with vision and mission statements in the current 
strategic plan for 2001-2006. Most of the discussion focused on the 
appropriate role for IDI in promoting good governance. Participants 
agreed that although the primary responsibility for good governance 
rests with the SAIs themselves, INTOSAI has a large role to play in 
this area and that IDI, through its training and information-sharing 
activities, can contribute in significant ways. In the end, the group 
agreed that the broad draft vision and mission statements express, 
with some minor modifications, an appropriate role for IDI. 

In the next session, the group participated in strategic analysis 
using a time-tested strategic planning tool, SWOT (Strengths, 
Weaknesses, Opportunities, and Threats). Participants were divided 
into four working groups to analyze the four elements of SWOT in 
relation to IDI programs, and each group appointed a note-taker to 
record and report on its analysis. Participants were asked to examine 
the SWOT analysis outputs and suggest ways to enhance strengths, 
reduce or eliminate weaknesses and threats, and capitalize on 
opportunities. 

Martin Sinclair, cofacilitator, helped draw the day to a close by 
summarizing his impressions of the most salient points raised by 
participants. Paraphrasing the discussions, he stated that IDI is not 
a substitute for INTOSAI and does not have sole responsibility for 
capacity building since goal 2 of the INTOSAI strategic plan also 
provides for a Capacity Building Committee. At the same time, close 
cooperation with INTOSAI and the goal 2 committee is needed and should 
result in greater harmonization of the work of IDI and INTOSAI. There 
needs to be greater awareness of IDI's work in the past but also an 
increased understanding of IDI's role in the future. It is important, 
Mr. Sinclair suggested, that IDI not forget what has worked in the 
past while it focuses on new and emerging needs and future issues. 
Once again paraphrasing participant comments, Mr. Sinclair said that 
IDI needs to strike an appropriate balance between the activities that 
have led to past successes and activities that will enhance IDI's 
future role and impact. Comments throughout the day highlighted IDI's 
emphasis on the practical; this emphasis, which focuses on outcomes 
rather than methods and processes, must be maintained. Participants 
felt that this approach has solidified IDI's reputation in the regions 
and that staff must be cognizant of it when carrying out activities 
from 2007 onward. 

The topic for day two was the important relationship between IDI and 
goal 2, capacity building, in INTOSAI's strategic plan. The session 
began with a video presentation by David Walker, goal 2 liaison and 
Comptroller General of the United States, who reiterated IDI's 
important role in INTOSAI's capacity-building activities. Mr. Walker 
stressed the need to form partnerships and diversify funding sources. 
He referred to the recently concluded peer review of the U.S. 
Government Accountability Office (GAO) and stressed how this process 
has both improved GAO's own operations and provided knowledge to be 
shared with other SAIs now and in the future. Mr. Walker talked about 
the role of the International Journal of Government Auditing in 
sharing knowledge and suggested that closer collaboration between IDI 
and the Journal might help to effectively disseminate information to 
the audit community. 

Next, Dr. El-Midaoui, Chairman of goal 2 and INTOSAI's Capacity 
Building Committee, eloquently set out the intent underlying goal 2. 
He pointed out that IDI is not the sole agency responsible for 
capacity building; in fact, many organizations share this 
responsibility. He stressed that there is no question of competition 
between the committee and IDI or duplication of efforts by the two 
entities, and that future efforts will focus on even greater 
harmonization and coordination. His emphasis clarified earlier 
questions and helped create a solid basis for a strong and fruitful 
partnership between IDI and the committee. 

The final session began with break-out groups focusing on key result 
areas, goals, and objectives in the draft strategic plan. To expedite 
the process and ensure that the session objectives were achieved, the 
following key result areas were proposed: 

1. Training: It was suggested that this term may be inappropriate 
given the suggestions and comments from participants. 

2. Information sharing: This could also include knowledge sharing as 
referred to in the INTOSAI strategic plan. 

3. Institutional capacity building: This was referred to in the 
mission statement. 

4. IDI capacity-building: This refers to developing the IDI 
organization. 

Cofacilitator Rick Steele suggested that these were the critical areas 
in which IDI must have an impact. Since the fourth area had been 
discussed at an earlier meeting with IDI staff (and a specific goal 
statement had been developed), participants agreed that no further 
work would be required in this area. Participants were to work on 
developing two goals for each of the remaining key result areas. The 
final session concluded with the group generating a comprehensive list 
of suggested programmatic activities for IDI's consideration. 

Participants and IDI staff alike agreed unanimously that the focus 
group had exceeded their expectations and had been characterized by 
rich and highly interactive discussions and deliberations. The results 
contributed significantly to the further development of IDI's 
strategic plan. For more information about IDI and its programs, 
contact: www.idi.no. 

[End of section] 

Audit Profile: The Auditor General's Department of Sri Lanka: 

By W.D. Hemaratne, Deputy Auditor General: 

Sri Lanka, formerly known as Ceylon, was a British colony until it 
gained independence in 1948. The nation's current population is around 
19.5 million. 

The origin of the present Auditor General's Department in Sri Lanka 
dates to 1799. At that time, the head of the department was the 
Accountant and Auditor General. In 1806, the accounting function was 
separated from that of the Auditor General, and the title was changed 
to Civil Auditor General. 

In 1841, three important offices—the Auditor General, the Accountant 
General, and the Controller of Revenue—were combined into one position 
that was held by a senior official called the Controller of Revenue. 
This arrangement continued for about 66 years. In 1907, three 
different officials once again held these offices, and the title of 
the head of the Audit Department was changed to Colonial Auditor. The 
separate and independent Auditor General's Department continues today. 
The title of Colonial Auditor was changed to Auditor General in 1931 
with the introduction of a new Constitution granting dominion status 
to the island. 

Mandate, Legal Authority, and Independence: 

The vision of Sri Lanka's Auditor General's Department is to make a 
significant impact on public accountability in Sri Lanka. Its mission 
is to promote good governance through the conduct of high-quality 
audits and to prepare timely and accurate reports to Parliament for 
the benefit of the citizens of Sri Lanka. 

The Constitution calls for the President of the Republic to appoint 
the Auditor General of Sri Lanka. The Auditor General's salary is 
determined by Parliament and cannot be reduced during his or her term 
of office. The Auditor General is functionally independent within the 
government, and the department is not assigned to any minister. The 
Constitution further safeguards the Auditor General's tenure of office 
by making it possible for the President to remove an auditor general 
from office only after a motion is tabled before Parliament and 
ratified by a majority vote. 

Article 154 of the Constitution empowers the Auditor General to audit 
the accounts of (1) all departments of the government and (2) offices 
and departments not assigned to any ministry, public corporation, 
local authority, business, or other undertaking vested in the 
government under any law. 

The categories and numbers of institutions the department audits are 
as follows. 

Category: Government ministries; 
Number: 57. 

Category: Departments; 
Number: 129. 

Category: Public corporations; 
Number: 239. 

Category: Provincial councils; 
Number: 8. 

Category: Local authorities; 
Number: 312. 

Category: Foreign-funded projects; 
Number: 70. 

Category: Agrarian service centers; 
Number: 523. 

The Constitution empowers the Auditor General to obtain the assistance 
of specialists to examine technical, professional, or scientific 
problems. It also allows the Auditor General to carry out more than 
financial audits—it gives the Auditor General implied authority to 
audit the economy, efficiency, and effectiveness of the operations of 
public sector institutions. The Finance Act of 1971, which deals with 
the financial control of public corporations, gives the Auditor 
General a broad scope of audit, including explicit authority to assess 
the economy, efficiency, and effectiveness of their operations. The 
scope of audit relating to all public sector institutions includes 
financial and nonfinancial aspects. 

As the auditor of the accounts of universities and local authorities, 
the Auditor General of Sri Lanka is vested with surcharge power. The 
statutes of local authorities empower the Auditor General to: 

* disallow any item of accounts contrary to law and charge the amounts 
to the person responsible for making or authorizing the illegal 
payment; 

* charge the responsible persons for any sum that has not been duly 
brought to account; and; 

* charge members, officers, or employees of a local authority for any 
loss that has arisen from their negligence or misconduct. 

However, the Auditor General has no power of surcharge relating to the 
audit of the accounts of government ministries and departments and 
public corporations, except for universities. 

Staff: 

The Public Service Commission appoints the Auditor General's staff, 
which consists of 7 deputy auditors general, 13 assistant auditors 
general, 218 superintendents of audit, and over 1,000 audit examiners. 
The department also employs 302 nonaudit staff. 

Reporting: 

The Constitution of Sri Lanka requires the Auditor General to report 
to Parliament within 10 months of the close of each financial year and 
when he or she deems it necessary to discharge his or her duties and 
functions. 

Future Prospects: 

The Auditor General Department's self-assessment of it strengths and 
weaknesses, a subsequent peer review by the Netherlands Court of 
Audit, and a 2002/2003 Country Financial Accountability Assessment 
Study by the World Bank confirm that public audit in Sri Lanka is weak 
and that its contributions to promoting financial accountability and 
good governance can be strengthened. The quality, relevance, and 
timeliness of audit information reported need to be improved 
significantly. Both organizational and institutional factors have 
contributed to the weakening of public audit over the years. 

Two major recommendations were made to strengthen the department and 
to improve its overall audit capability: 

* enactment of an audit act, and; 
* preparation of an institutional development plan. 

Audit Act: 

Sri Lanka does not have an audit act setting out in detail the duties 
and functions of the audit staff. After a series of discussions and 
seminars with officers of the Auditor General's Department and 
stakeholders, a consultant with local and international experience 
prepared a draft audit act. The draft act contains provisions to give 
the department financial and administrative independence and explicit 
authority to carry out value-for-money audits. It also provides 
detailed information on the scope and extent of audit and reporting 
requirements. The draft act has not yet been submitted to the Cabinet 
of Ministers and Parliament for approval. 

Institutional Development Plan: 

The National Audit Office of the United Kingdom and the National Court 
of Audit of the Netherlands, with the assistance of the World Bank, 
prepared an institutional development plan for Sri Lanka's Auditor 
General's Department. The plan covers the following in detail: human 
resources, audit methodology, information technology, communications 
and external relations, and infrastructure. 

To ensure early implementation, local consultants are preparing a 
detailed action plan for the department that includes implementation 
costs. 

For additional information, contact: Auditor General's Department, 
Independence Square, Colombo 07, Sri Lanka; 
telephone: ++(0094)11-2691151; 
fax: ++(0094)11 2697451; 
e-mail: oaggov@sltnet.lk. 

[End of section] 

Reports in Print: 

The Public Management Institute of Belgium has issued a report on 
international evolutions in public sector auditing entitled The 
Modernization of the Public Control Pyramid: International Trends. The 
report compares the external and internal audit systems in the 
central/federal governments of six countries: Australia, Canada, the 
Netherlands, Sweden, the United Kingdom, and the United States. The 
report focuses on several key features of the SAIs of these countries, 
specifically their mandates, their organizational structures, and the 
external scrutiny they receive. The report also addresses the 
challenges that face each SAI and discusses the different types of 
audits they conduct. The report points out that SAIs perform other 
roles in addition to financial and performance auditing. For example, 
auditors are now required to develop and improve new techniques and 
methodologies to assess whether performance measures are actually used 
by audited entities. To obtain a copy of the report, contact the 
Public Management Institute, Department of Political Sciences, 
Catholic University of Leuven, E. Van Evanstraat 2C, 3000 Leuven, 
Belgium; 
fax: ++0032-16-3236-11; 
Web site: www.soc.kuleuven.be/sbov/eng/pub/se040509.htm. 

Forensic Document Examination Techniques, published by The Institute 
of Internal Auditors Research Foundation, offers a glimpse into the 
fascinating world of forensic document examination—where forgeries and 
altered records are examined daily. While key forensic evidence may be 
in handwriting, it may also be found on the edge of the paper, in the 
chemical composition of ink, or in the indentations left from other 
documents. Auditors who choose not to educate themselves risk 
overlooking or destroying important evidence. This handbook is 
designed to provide background information on the field of forensic 
document examination and in-depth descriptions of the tools that 
auditors, investigators, and other nontechnical users need to conduct 
various reviews. It contains the information needed to recognize 
potential evidence of forgery or fraud and know how to conduct field 
examinations. It also provides tips regarding evidence collection and 
preservation and identifies the situations in which the services of a 
trained document examiner become necessary. To order a copy of this 
handbook, contact the Institute of Internal Auditors, 
fax: ++770-280-4013; 
e-mail iiapubs@pbd.com; 
telephone: ++770-280-4183. 
You can also order it online at 
www.theiia.org/iia/bookstore.cfm?fuseaction=product_detail&order_num=493
 

An audit committee plays a pivotal role in the governance framework of 
organizations in both the public and private sectors. Recent and 
emerging developments in both sectors point to the increasing 
importance of audit committees, including the degree of reliance chief 
executives and boards place on them to provide independent assurance 
and assistance. In February 2005, the Australian National Audit Office 
(ANAO) published its better practice guide Public Sector Audit 
Committees. The guide updates and replaces one that the ANAO issued in 
1997. It recognizes that there is no one model audit committee that 
all entities should adopt. Rather, the precise role each audit 
committee plays should be determined within the context of the 
entity's particular governance framework. The ANAO guide is
intended as a reference document for chief executives, boards, members 
of audit committees, and people with specific audit committee 
reporting responsibilities and accountabilities. It is structured 
around the six key characteristics of a better practice audit 
committee in the Australian government public sector: a good 
understanding of the audit committee's position in the legal and 
governance framework; clearly defined roles and
responsibilities; members with relevant personal qualities, skills and
experience; the ability to maintain effective relationships with key 
stakeholders; the ability and capacity to conduct its affairs 
efficiently and effectively; and a robust and considered process of 
performance assessment. The first part of the guide outlines
better practice principles and practices, including relevant 
considerations in establishing and operating a better practice public 
sector audit committee. The second provides model charters for 
different types of organizations and materials that audit committees 
can use in implementing better practice principles and supporting 
processes. A copy of this guide can be downloaded from the ANAO Web 
site: www.anao.gov.au. 
To obtain a printed copy, e-mail: webmaster@anao.gov.au. 

The government's accountability to its citizens–the idea that the 
public sector must answer to the people for its performance–is the 
foundation for good governance. Under good governance, public 
expenditures are allocated to maximize welfare, revenues are
collected efficiently, and the public at large has access to a number 
of public services including water and sanitation, infrastructure, 
education, and health. In many developing countries, however, people 
suffer the results of dysfunctional governance systems that fail to 
provide even minimal levels of vital public services. This happens 
because of an acute deficiency in government accountability—public 
servants lack the incentives to show results or manage government 
resources more efficiently. In the public sphere, incentives for 
public servants and policymakers are derived from the countries' 
accountability frameworks–rewards, sanctions, and performance 
measurement–that shape public sector performance. A new publication by 
the World Bank entitled Fiscal Management and Accountable Public 
Governance applies this fundamental insight to fiscal/budgetary 
analysis and public service delivery, giving the reader real world 
examples from around the globe of institutional arrangements to help 
citizens hold government accountable for its performance. This report 
describes methods and tools to bring government closer to the people, 
make it more accountable, and improve government performance. For a 
copy, contact the World Bank Infoshop, 1818 H Street, NW, MSN-J1-100, 
Washington, DC 20433 USA; 
fax: ++(202)-522-1500; 
e-mail: pic@worldbank.org; 
Web site: www.worldbankinfoshop.org. 

[End of section] 

Inside INTOSAI: 

Accounting and Reporting Subcommittee: 

The Accounting and Report Subcommittee of the Professional Standards 
Committee, formerly the Accounting and Reporting Committee, is an 
official observer of the International Public Sector Accounting 
Standards Board (IPSASB) as it sets international public sector 
standards. The subcommittee has full floor rights at IPSASB meetings 
and represents the broad interests of the SAI community. 

At its latest meeting, the IPSASB continued its debate on an exposure 
draft for the standard on revenue from nonexchange transactions. This 
is expected to be the first standard that deals with a unique 
government issue; it includes the accounting for tax revenues. The 
exposure draft is to be issued for comment by the end of 2005. 

Another exposure draft under development addresses the reporting of 
budgetary information in general-purpose financial statements. Under 
this draft, both budget and actual amounts would be reported for 
comparison. This exposure draft should also be issued before the end 
of 2005. 

The IPSASB is also continuing to develop an exposure draft on social-
policy obligations accounting for programs such as old age pensions, 
social welfare, and other social services. There are complex 
accounting and conceptual issues related to these types of programs. 
One or more exposure drafts are expected to be issued for comment in 
2006. 

The subcommittee will keep the SAI community informed about IPSASB 
developments on an ongoing basis. 

For additional information, contact: U.S. Government Accountability 
Office, fax: ++(202) 512-4201; e-mail: spel@gao.gov. 

Subcommittee on Financial Audit Guidelines: 

With the establishment of the Professional Standards Committee (PSC), 
the INTOSAI Auditing Standards Committee became the PSC's Subcommittee 
on Financial Audit Guidelines. The subcommittee holds two meetings 
each year. As reported in the July 2005 Journal, the SAI of Peru 
generously hosted the subcommittee's first 2005 meeting in Lima on 
March 2-4. At that meeting, the terms of reference for experts working 
on practice notes were approved, as were the reporting format and 
procedures for the practice note process. After the Lima meeting, the 
subcommittee held a telephone conference on June 20 and approved a new 
work plan for 2005-2007. The subcommittee also provided comments to 
the International Auditing and Assurance Standards Board (IAASB) on 
the exposure drafts of International Standards on Auditing (ISA) 320, 
540, and 600. 

Reference Panel Meetings in Stockholm: 

Close to 60 different SAIs have nominated over 100 experts to the 
reference panel. This has enabled the subcommittee to make remarkable 
progress on developing financial audit guidelines for INTOSAI.
In February 2005, all reference panel members appointed as experts or 
back-office experts on ISA task forces and members of the panel's 
focus group were invited to Stockholm. They exchanged experiences, 
discussed the development of practice notes, and provided suggestions 
for improving the process of developing INTOSAI financial audit 
guidelines. INTOSAI experts from Denmark, India, Italy, Malaysia, the 
Netherlands, New Zealand, Norway, Slovenia, South Africa, Sweden, the 
United Kingdom, and the United States took part in the meeting along 
with IAASB technical staff. 

In June 2005, 16 members of the reference panel who were not yet 
appointed as experts or back-office experts were invited to Stockholm 
for a working meeting. They were introduced to the work with the 
guidelines and provided input on ongoing work. At that time, INTOSAI 
expert nominees from Colombia, the Czech Republic, Denmark, Ecuador, 
Finland, Greece, Hungary, Jordan, Lesotho, Nepal, the Netherlands, 
Norway, Saudi Arabia, Turkey, Tunisia, and the United Kingdom 
participated in the meeting along with IAASB technical staff. 

Information on Ongoing Work: 

In each issue of the Journal, the subcommittee Project Secretariat 
offers a brief update on the ongoing work with ISA task forces. The 
Web site of the International Federation of Accountants (www.ifac.org) 
provides updated information on the ISA task forces, exposure
drafts of ISAs, and related matters. The subcommittee's Web site 
(http://asc.rigsrevisionen.dk) offers current information on such 
topics as work with the guidelines and the approved minutes from 
committee and working group meetings. 

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

ISA 230 — Documentation: 
Expert: Ms. Kelly Anerud, Norway
Back-office experts: Mr. John Fretwell, United States; Mr. Inge 
Danielsson, Sweden: 
Final version expected in September 2005 and Practice Note expected in 
June 2006. 

ISA 705 — Modifications to the Opinion in the Independent Auditor's 
Report and ISA 706 — Emphasis of Matter Paragraphs and Other Matters 
Paragraphs in the Independent Auditor's Report: 
Expert: Vacant
Back-office experts: Ms. Marcia Buchanan, United States; Ms. Mary 
Radford, United Kingdom: 
Final version expected in March 2006 and Practice Note expected in 
December 2006. 

ISA 260 — Communications with Those Charged with Governance: 
Expert: Ms. Tove Myklebust, Norway: 
Back-office experts: Mr. Filip Cassel, Sweden; Mr. John Fretwell, 
United States: 
Final version expected in March 2006 and Practice Note expected in 
December 2006. 

ISA 800 — The Independent 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; and Mr. Robert Cox, New Zealand: 
Final version expected in March 2006 and Practice Note expected in 
December 2006. 

ISA 550 — Related Parties: 
Expert: Mr. John Thorpe, United Kingdom: 
Back-office experts: Ms. Zainun Taib, Malaysia; Mr. Uwe Schreiner, 
Germany; and Ms. Goranka Kiralj, Slovenia: 
Final version expected in June 2006 and Practice Note expected in 
March 2007. 

ISA 580 — Management Representation: 
Expert: Ms. Vijaya Moorthy, India: 
Back-office experts: Mr. Martin Garrido, Chile; Mr. Ennio Colasanti, 
Italy: 
Final version expected in September 2006 and Practice Note expected in 
June 2007. 

ISA 620 — Using the Work of an Expert: 
Expert: Ms. Claudio Branco, Brazil: 
Back-office experts: Mr. Andras Morvay, Hungary; Monica Besetsa, 
Lesotho: 
Final version expected in December 2006 and Practice Note expected in 
September 2007. 

In addition, the subcommittee is 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. 

Practice notes will also be developed for ISAs already approved at the 
time the reference panel was created or where no expert participated 
in the IAASB task force. The Project Secretariat is currently forming 
task forces with experts and back-office experts from the reference 
panel to develop practice notes for these ISAs. 

Work Ahead: 

Before the end of the year, the heads of all INTOSAI SAIs will receive 
a letter from the subcommittee chair asking them to nominate experts 
and to reconfirm their commitment regarding the experts that are 
already a part of the reference panel. 

Funding the Project: 

The project entirely relies on the contributions by the experts and 
their respective SAIs, who have agreed to cover the costs.The Project 
Secretariat is continuously approaching external parties to seek 
external funds. The project has so far been granted funding from the 
World Bank and the Asian Development Bank. These funds will, among 
other things, cover the costs for reference panel meetings, certain 
WGFA meeting expenses, the running of the Project Secretariat, 
translations of standards and guidelines into the official INTOSAI 
languages, and printing and distributing of approved guidelines.
For further information, please contact the Project Secretariat, fax: 
++46-8-5171 4111; e-mail: projectsecretariat@riksrevisionen.se; Web 
site: http://asc.rigsrevisionen.dk. 

Committee on IT Audit: 

The 14th meeting of the INTOSAI Standing Committee on IT Audit was 
held at Paro, Bhutan, April 27-29, 2005. Attending the meeting were 48 
delegates and 10 observers from 23 member countries and the INTOSAI 
Development Initiative. 

On April 26, 2005, the district head of Paro, Dasho Lam Dorji, hosted 
a dinner in honor of the delegates. For the opening ceremony, His 
Excellency Lyonpo Khandu Wangchuk, Bhutan's Minister for Foreign 
Affairs, was the chief guest. Other senior officers from the Royal 
Government of Bhutan also attended. 

During the meeting, delegates updated the group on initiatives from 
the previous meeting, including issues related to the committee Web 
site, measures taken to counter fraud in the IT environment, INTOSAI 
IT audit courseware and advanced training modules, and computer-
assisted audit techniques (CAATS) for nonfinancial auditing. Delegates 
also discussed ongoing projects on auditing e-government, a proposed 
survey for future projects, and the use of modern technology in 
INTOSAI's decision-making. 

Several SAIs presented country papers on topics such as computerized 
audit systems and the results of the first work period (2002-2005) of 
the EUROSAI IT working group. In addition, IDI discussed cooperative 
training matters. The committee decided that its 15th and 16th 
meetings will be held in Brazil and Oman, respectively. 

In addition to the professional discussions, the delegates and 
observers visited Thimphu, the capital of Bhutan, and were taken on a 
trekking trip to Paro Taktsang (the Tiger Nest Monastery). 

For additional information, contact: Chair, Committee on IT Audit, 
Principal Director International Relations, Office of the Comptroller 
and Auditor General of India, fax: ++91 (11) 2323; e-mail: 
cag@cag.gov.in; Web site: www.intosaiitaudit.org/.
		
[Photograph: Attendees of the IT audit committee meeting outside the 
National Assembly Hall of Bhutan] 
	
Public Debt Committee: 
	
The INTOSAI Public Debt Committee met in Sofia, Bulgaria, June 2-3, 
2005, to plan future activities in its successful joint training 
program with IDI and regional INTOSAI associations. Committee members 
also discussed potential themes for the next Congress of INTOSAI in 
2007 in Mexico City and two surveys on laws applicable to public debt 
and reporting on contingencies. 

The program started in 2003 with intensive 2-week public debt auditing 
workshops in Spanish for SAIs in the OLACEFS region. More than 70 
auditors were trained to conduct public debt audits in their 
countries. In 2004, ASOSAI instructors delivered the first workshop in 
English for 31 SAI members in Asia, the Pacific, and the Middle East. 
Before the delivery of the course in Canberra, Australia, IDI-trained 
instructors from Bangladesh, Bhutan, China, India, Indonesia, Nepal, 
and Vietnam produced course materials in English with the support of a 
subject matter expert from the U.S. Government Accountability Office. 
IDI plans to deliver a public debt auditing workshop for Russian-
speaking SAIs in the near future. IDI will also distribute the English 
version of the course among other interested SAIs. 

At the meeting in Sofia, Arturo Gonzalez de Aragon, Chairman of the 
Public Debt Committee, stressed the importance of having a theme 
related to public debt as part of the technical discussions at the 
2007 INCOSAI in Mexico. After considering a number of themes that 
could be proposed at the 54th INTOSAI Governing Board meeting, the 
committee members agreed on the following—theme: public debt, with 
subthemes (1) public debt management and (2) accountability and 
auditing of public debt. 

The Public Debt Committee will meet again in 2006 in Buenos Aires, 
Argentina. 

For additional information, contact: Public Debt Committee, 
e-mail: bfuentes@asf. gob.mx; 
Web site: www.intosaipdc.org.mx; or: 
INTOSAI Development Initiative, 
e-mail: idi@idi.no; 
Web site: www.idi.no. 

Changes in CAROSAI: 

A new era began in CAROSAI on September 1, 2005, when the SAI of Saint 
Lucia assumed the General Secretariat. Since CAROSAI's inauguration in 
1988, the Secretariat had been located within the Auditor General's 
Department of the SAI of Trinidad and Tobago. While Trinidad and 
Tobago considered it an honor to house the Secretariat for the past 17 
years, it has now passed this leadership role to Saint Lucia. This 
decision was approved at the VI CAROSAI Congress held in Bermuda in 
August 2003, and the Government of Saint Lucia was granted formal 
approval by the Cabinet Conclusion dated August 30, 2004. 

All correspondence regarding CAROSAI should be addressed to Mrs. 
Arlette Hyacinth, Director of Audit, Office of the Director of Audit, 
Conway Business Center, Level 3, Jn Baptiste Street, Castries, 
Waterfront, Saint Lucia; telephone: ++1-758-468-1501, -1508, or -1510; 
fax: ++1-158-468-1534; e-mail: audit@gosl.gov.lc. 

18th UN/INTOSAI Seminar in Vienna: 

From April 18-22, 2005, the United Nations (UN) and INTOSAI hosted a 
joint symposium, The Use of Information and Communication Technologies 
in the Audit of e-Government: A Strategy for Efficiency, Transparency 
and Accountability. The symposium was held at the Vienna International 
Center, the UN's seat in Vienna. About 60 delegates, primarily heads 
of SAIs, attended the event. Speakers came from the UN, the World 
Bank, and the SAIs of Argentina, Canada, India, Oman, South Africa, 
and Austria. A representative of the United Kingdom National Audit 
Office served as technical chair. 

[Photograph: Participants in 18th UN/INTOSAI Seminar in Vienna] 

During the seminar, participants held in-depth discussions on the 
following topics: 

* the legal framework and audit mandate for e-government audit, 

* the current status and future aspects of e-government, 

* risks in the field of e-government, 

* online audits of e-government, 

* challenges when auditing e-government, and, 

* electronic procurement. 

The SAIs of Algeria, Bhutan, Bolivia, Chile, Denmark, the Dominican 
Republic, Ethiopia, Fiji, Israel, Jamaica, Japan, Kuwait, Lesotho, 
Libya, Lithuania, Malawi, Mongolia, Namibia, the Netherlands, Tunisia, 
and Venezuela reported on the use of information and communication 
technologies in e-government audits in their countries. Seminar 
participants provided valuable insights about the organization of 
their SAIs and exchanged information on future trends and the 
potential for improving their SAIs' audits of e-government. 

Following the keynote speeches, discussions enabled participants to 
exchange ideas and identify key aspects of e-government audits. 
Several working groups at the symposium afforded participants a 
smaller forum for sharing their experiences and the opportunity to 
address issues raised during the discussions in greater detail and to 
arrive at conclusions and recommendations. 

Specifically, seminar participants concluded the following: 

* SAIs should take on a proactive role in e-government to promote 
increased transparency and improved services for citizens. 

* Governments should elaborate e-government strategies that are 
subject to SAI audit. 

* Auditors should receive the education and training necessary to meet 
the requirements of e-government audits. 

* SAIs should launch a broad-based exchange of experiences and a 
process of mutual learning in the area of auditing e-government. 

* The role of SAIs in auditing government financial management should 
be enhanced. 

Participants also discussed the need for sufficient funding as well as 
audit-related methodological skills and expertise if SAIs are to carry 
out their statutory audit mandates most effectively. 

Upon completion, the report on the 18th UN/INTOSAI seminar will be 
available on the INTOSAI Web site. 

For additional information, contact: INTOSAI Secretariat, fax: ++43 
(1) 718 09 69; 
e-mail: intosai@rechnungshofgy.at; 
Web site: www.intosai.org. 

[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 Web 
site: www.idi.no. 

Capacity Building for Newly Established SAIs in ASOSAI: 

IDI and the Asian Development Bank are sponsoring and implementing a 
capacity-building program for newly established SAIs in ASOSAI. The 
program is intended to meet the needs of relatively new SAIs in the 
region, where the audit capacity of member SAIs differs widely. Two 
subregional groups will be targeted—one in Central Asia (including 
Azerbaijan, Kazakhstan, Kyrgyzstan, and Mongolia) and the other in 
Indochina (including Afghanistan, Cambodia, Maldives, Myanmar, Laos, 
and Vietnam). The first needs survey mission, for the Central Asian 
republics, took place in Mongolia in August 2005. The mission 
identified the wider capacity-building needs of the target SAIs and 
obtained their commitment to follow-up activities. Two workshops will 
be designed and delivered in each subregion following needs surveys. 

New Pool of Training Specialists in Sub-Saharan Francophone African 
SAIs (CREFIAF): 

Thirty participants from the Sub-Saharan Francophone African SAIs 
(CREFIAF) successfully completed a comprehensive 7-week Course Design 
and Instructional Techniques Workshop held in Cotonou, Benin, in June 
2005. As part of the workshop, participants developed a course on 
performance auditing. The participants are now designing 2-day courses 
on others topics, which they will submit to IDI in order to be 
certified as IDI training specialists. 

Update on the OLACEFS E-learning Project: 

The IDI/OLACEFS pilot project on e-learning is proceeding on schedule. 
The persons involved in delivering the course recently completed a 
trial period and are serving as tutors in the performance auditing 
course, which began in mid-September 2005 and will run for 10 weeks. 
Sixty participants from SAIs in OLACEFS are enrolled in the course. 

Other Activities in OLACEFS: 

In June 2005, seven new OLACEFS training specialists met with IDI 
staff in San Jose, Costa Rica, to redesign and improve the 2-week 
course on the Audit of Public Services that was designed during their 
Course Design and Instructional Techniques Workshop in Quito, Ecuador, 
earlier in the year. The new training specialists served as 
instructors for the course when it was delivered in Bogota, Colombia, 
in September 2005. 

IDI/ARABOSAI Capacity-building Program in IT Auditing: 

IDI and ARABOSAI recently entered into a new cooperation agreement for 
a capacity-building program in IT audit. The objective is to train a 
pool of 24 IT auditing "champions" from eight SAIs that are currently 
carrying out IT audits or are implementing IT auditing. The first 
activity of the program was a 3-day curriculum meeting held in Oslo, 
Norway, in August 2005. Participants included IDI staff; subject 
matter experts from Norway, Oman, and the United Arab Emirates; and 
representatives from ARABOSAI. This was followed by a design meeting 
held in Jordan in September 2005. 

Follow-up Workshop in AFROSAI-E: 

In 2003, IDI conducted a Course Design and Development Workshop (CDDW) 
for 23 participants from AFROSAI-E (English-speaking African SAIs) who 
had previously attended a regional Instructional Techniques Workshop. 
In July 2005, IDI organized a 1-week follow-up workshop in Nairobi, 
Kenya. This workshop provided feedback on the 2-day courses designed 
by the participants and evaluated their instructional skills so that 
those who met all the requirements would graduate as training 
specialists. 

Contacting IDI: 

To discuss any issues raised in this edition of IDI Update, please 
contact: IDI, telephone: ++47 21 54 08 10; e-mail: idi@idi.no. 

[End of section] 

INTOSAI 2005-2006 Events: 

October 27-November 1: 
Working Group on Environmental Auditing, Moscow, Russia. 

November 10-11: 
INTOSAI Governing Board Annual Meeting, Vienna, Austria. 

November 26-December 14: 
IDI/ARABOSAI IT Audit Champions Program, Muscat, Oman. 

November 28-December 9: 
IDI Global E-Laboratory, Kuala Lumpur, Malaysia. 

December 12-16: 
IDI/ASOSAI Workshop on Audit of Fraud and Corruption, Lahore, Pakistan. 

May 23-21: 
INTOSAI Committee on IT Audit, Mexico City, Mexico. 

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

June TBD: 
Environmental Audit Steering Committee, Yogyakarta, Indonesia 

September: 
TBD CAROSAI Congress, Freeport, Bahamas. 

TBD =To be determined 

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 October 2005 Journal]