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Three Parties Involved in Compliance Audit: A Model of Assurance
In the world of compliance auditing, three parties play crucial roles: the Auditor General, the audited entity (the government department), and the relevant authorities. The Auditor General provides limited assurance that the audited entity has complied with the laws, regulations, and policies governing its activities.
Determining the Subject Matter and Criteria
The subject matter of a compliance audit refers to the specific area or activity being examined, such as procurement sourcing practices or expenditures related to training activities. The subject matter information is the outcome of evaluating or measuring the subject matter against the criteria. Criteria are derived from authorities, such as laws, regulations, policies, and standards.
For instance, in an audit of a government department’s procurement sourcing practices, the subject matter might be “procurement planning within a specific area.” The subject matter information could be the documentation of the planning process, including the preparation of bids and tenders. The criteria for evaluating this process would be derived from relevant laws and regulations governing procurement.
Conflicting Authorities
In some cases, auditors may encounter conflicting authorities. This can occur when there are multiple sources of authority that seem to contradict each other. In such situations, auditors must consider the hierarchy of authorities, with higher-level authorities prevailing over subordinate ones.
For example, if a law regulating procurement within a specific area contradicts an internal regulation of the government department, the auditor would need to identify the contradiction and recommend changes to the subordinate regulation to ensure compliance with the law.
Characteristics of Audit Criteria
Suitable audit criteria exhibit several characteristics, including:
- Relevance
- Completeness
- Reliability
- Neutrality
- Understandability
- Usefulness
These criteria provide a comprehensive picture of how the subject matter should be evaluated and help auditors assess regularity and propriety aspects of an entity.
In conclusion, the three parties involved in compliance auditing - the Auditor General, the audited entity, and the relevant authorities - work together to ensure that government activities are carried out in accordance with laws, regulations, and policies. By determining the subject matter and criteria for evaluation, auditors can provide limited assurance that these requirements have been met.
Media Article
Title: Three Parties Involved in Compliance Audit: A Model of Assurance Subtitle: Auditor General Provides Limited Assurance that Government Activities Comply with Laws and Regulations Date: March 10, 2023
In a recent compliance audit, the Auditor General’s office has highlighted the importance of three parties working together to ensure that government activities are carried out in accordance with laws, regulations, and policies.
The Auditor General provides limited assurance that the audited entity (in this case, a government department) has complied with the relevant authorities. The audited entity is responsible for implementing these requirements, while the relevant authorities provide the framework for compliance.
The audit found that the government department had implemented some of the required processes, but also identified areas where improvements were needed. The Auditor General’s report highlighted several instances of non-compliance and made recommendations for improvement.
The Auditor General emphasized the importance of collaboration between the three parties to ensure that government activities are carried out in accordance with laws and regulations.
“This audit is a classic example of how our office works with the audited entity and relevant authorities to ensure that government activities are transparent, accountable, and compliant with requirements,” said the Auditor General. “Our limited assurance provides stakeholders with confidence that these requirements have been met.”
The report has been submitted to the relevant authorities for further action.