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Compliance Audit Guidelines

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The Comptroller and Auditor General (CAG) of Bangladesh has outlined guidelines for conducting compliance audits in various sectors. This document summarizes the main points to ensure effective implementation.

Key Principles

Risk-based Approach

  • The audit planning should be based on a risk-based approach to identify high-risk areas and activities that require attention.
  • Importance of sector: The importance of the sector in the overall scheme of governance should be considered while selecting units for compliance audit.

Compliance with Laws and Regulations

  • Compliance audit will focus on examining whether a particular subject matter is in compliance with applicable laws, rules, and regulations.

Sources of Inputs

The following sources can be used to gather inputs for preparing annual audit plans:

  • Budgets and appropriations
  • Annual Development Programmes and Plans
  • Annual Reports of Ministries/Divisions and Departments
  • Policy announcements of Ministries/Budget announcements/introduction of new schemes and programmes
  • Trends of expenditure/ receipts/ Unusual spikes or dips in expenditure or receipts from i BAS++ and any other source
  • Suggestions of PAC (Public Accounts Committee) and other Parliamentary Committees
  • Media Reports
  • Past Audit findings/Audit reports/Follow-up of past audit reports
  • Annual Reports of Companies and Statutory public authorities
  • Geographical locations and distance from the unit from the Capital or district headquarters
  • Finance Accounts and Appropriation Accounts/financial statements of the authorities

Risk-based Approach

When selecting units for compliance audit, high-risk areas and activities should attract attention and be prioritized. The potential risk of non-compliance should be considered while identifying audit areas and entities.

Financial Transactions as Focus

The primary focus of compliance audit will continue to be financial transactions, including those that have occurred but should not have (delays and losses, wastes and leakages).

Overall, the guidelines emphasize the importance of a risk-based approach in conducting compliance audits, focusing on high-risk areas and activities, and ensuring compliance with applicable laws, rules, and regulations.