IV. PROJECT DESCRIPTION
4.1 BIBLIOGRAPHIC BACKGROUND
The Dean of the Lima College of Public Accountants in his message on the occasion of the II Inter-American Conference on Fraud and Corruption in government: PERU RESPONDACON II, February 1992, said: “When in the city of Miami (USA), in The First Inter-American Conference on Problems of Fraud and Corruption in the Government was concluded in December 1987 and it was recommended that a second conference be held within the next two years. It was evident that the topic of fraud and corruption was, is, and will be valid as the whole conscious and honest community constantly complains ”.
"Fraud and Corruption enemies of Development", is the title of an Institutional Magazine edited by the College of Public Accountants of Lima, the objective of this publication is to present summaries of those books, articles, conferences, works presented at international events, and in provides up-to-date information on this sensitive topic of fraud and corruption; to disseminate those experiences or research results on the subject that we are sure will allow an analysis and reflection with the firm purpose of contributing to definitively banishing this social problem that undoubtedly limits the development of our country.
Robert Klitgaard's book, "Controlling Corruption", quoted in the Journal "Fraud and Corruption Enemies of Development" of the Lima College of Public Accountants, is designed to help, analyze corrupt practices and resolve what to do with them in the aspect legal, social, accounting, financial and audit.
The US Ambassador Mark L. Edelman, in his Opening Address of the XVIII Inter-American and Iberian Seminar on Public Budget dated 05.20.1991; Quoted in the Magazine "Fraud and Corruption Enemies of Development" of the College of Public Accountants of Lima, he said: "If peace, democracy and economic recovery are to continue and flourish in this hemisphere, the foundation for progress must be governments that efficiently, effectively and "responsibly" manage their financial resources, in accordance with the law. Integrity is the key to carry out this process ”.
Juan R. Herrera, quoted in the Magazine "Fraud and Corruption Enemies of Development" of the College of Public Accountants of Lima, in his presentation at the International Conference on Problems of Fraud and Corruption in the Government, of December 1989, referred to the participation of professional organizations in helping to strengthen morality in the governmental sphere. The work of comprehensive auditing is emphasized as one of the best ways to contribute to fighting fraud and corruption that prevails in the national, regional and local governments of the countries.
The same author at the III Annual Conference on New Developments in the Government Financial Directorate of April 1989, said that corruption is such a broad concept and reaches so many and so different levels of society, that it is almost a contradiction to speak about how the Governments financial management can control corruption in general terms. Governments will always have the responsibility to take action to control corruption in the community as a whole.
Alberto Ramírez Enríquez, in the conference called: "Measures to prevent corruption in the company", given at the Third Inter-American Meeting of External Auditors in October 1991; He said that fraud and corruption have become an intangible and amorphous institution that somehow involves people, institutions and resources. Newspapers, television and radio report complex embezzlements, major business frauds and commercial crimes that ordinary citizens cannot but be amazed at the evident ingenuity and efficiency with which these people operate.
The same author in his work called: "Attitude of the Independent Auditor towards acts of corruption", presented to the XIX Inter-American Accounting Conference in December 1991; he mentions: “corruption is an incurable evil, in our environment it is in fashion; therefore, anti-corruption programs must be developed at different levels in order to overcome this situation in business, business administration and corporate governance of public or private entities ”.
Dr. Julio César Brión, quoted in the Magazine “Fraud and Corruption Enemies of Development” of the College of Public Accountants of Lima, in his work presented at the Third Inter-American Meeting of Internal Auditors in October 1991; He says: “it is undoubted that a company is not in itself fraudulent or corrupt. They are the people who are in charge of the management, the execution of business rules and procedures and, therefore, it is they who must assume all responsibility for the acts of the same.
Jorge Alejandro Sánchez Henríquez, Chilean Public Accountant, at the XXIII Inter-American Accounting Conference; He said: "The comprehensive audit provides us with an excellent tool to better position ourselves in front of our clients, suppliers, creditors and even our competition and at the same time it gives us greater possibilities to provide added value to the work of the contemporary auditor."
Armando Miguel Casal and Mario Wainstein, at the XXIII Inter-American Accounting Conference, agreed when indicating that the integral audit is a complete control model of the management of an entity, including its environment.
We agree with the concept and objectives stated by Miguel H. Bravo Cervantes, when he mentions: "Comprehensive audit is the comprehensive, methodological, objective, systematic, analytical and independent examination and evaluation with respect to the performance of a company, its operational processes, as well as the application and adaptation of its resources and its administration, carried out by professionals, with the purpose of issuing a report, to formulate recommendations contributing to the optimization of the economy, efficiency, effectiveness and compliance of business management.
The Peruvian author highlights the following objectives of the comprehensive audit: i) Evaluate the company in all its areas; ii) Obtain knowledge of the performance of business management; iii) Evaluate the efficiency and degree of reliability of administrative, legal, accounting, financial, economic, labor, etc information; iv) Examine achievement of objectives; v) Assist the leadership and management for greater effectiveness and productivity of operations; and, vi) Make recommendations that include their respective follow-up.
In the public and private universities of Metropolitan Lima there are many jobs related to financial auditing, internal auditing, internal control, management auditing, ecological auditing; However, there are very few works on comprehensive auditing:
In this regard, in the Postgraduate School of our University, the thesis has been located: “Control actions for the development of a comprehensive audit in a Public University” belonging to Elcida Herlinda Liñán Salinas; This document highlights the importance of control actions, audit programs, audit procedures, techniques and audit practices in order to obtain the evidence the auditor needs to issue her report. This document does not refer to comprehensive auditing as a tool to fight fraud and corruption, which exist in the public and private sectors.
It has also been found in the same entity and in charge of the same author the thesis: "The comprehensive audit in the optimization of public universities". This document highlights the relevance of the integral audit for the achievement of the accuracy, efficiency, effectiveness and economy of the resources of public universities ”. Nowhere is there any mention of comprehensive auditing as a tool to fight fraud and corruption in public universities.
In Internet search engines such as: Monographs, Google; High view; Terra and others have found scattered information, written anonymously. Said information refers to: definitions, objectives, general principles, regulations, process, procedures and other aspects of the Integral Audit and the fight against fraud and corruption.
4.2. DELIMITATION OF THE INVESTIGATION
This investigation will be delimited as follows so that it can meet the objectives of the investigation:
1. SPACE DELIMITATION
This investigation includes the Regional Governments established in our country (26); especially the Regional Governments of Lima-Provinces, Lima - Metropolitan and Callo, for the importance they have for the development of this important area of our country.
2. TEMPORARY DELIMITATION
This research will understand the past, present and future of the Regional Governments: From the past and the present, the regulations and the way in which these entities are managed and controlled are obtained. Basically the work will be oriented to the future, since comprehensive auditing is a professional activity that has not yet been applied regularly in our country, much less in this type of entities that are relatively new, but that have great significance in the life of the country.
3. SOCIAL DELIMITATION
As part of the investigation, we will establish relationships with the authorities, officials and workers of the regional governments, who know and live the legal experiences, decisions and execution of the activities entrusted to this level of State management; therefore they will tell us to what extent they know the integral audit and how it could affect the fight against fraud and corruption that several regional governments are already suffering;In addition, the participation of specialists from the Metropolitan Lima Audit Societies and Audit teaching staff from Public and Private Universities will be considered, who with their experience and knowledge about auditing will give us their contributions to adequately relate to comprehensive auditing and the fight against fraud and corruption in regional governments. There are university teachers, who for more than forty years of their lives have been dedicated to conducting audits in the private and government sectors, therefore these people are an extraordinary source for our work.therefore these people constitute an extraordinary source for our work.therefore these people constitute an extraordinary source for our work.
4. CONCEPTUAL DELIMITATION
The main concepts that will be developed are given by the variables that the research work will use:
(1) COMPREHENSIVE AUDIT: Independent Variable
(2) REGIONAL GOVERNMENTS: Intervening variable
(3) FIGHT AGAINST FRAUD AND CORRUPTION: Dependent Variable
Another conceptual source is the indicators of the aforementioned variables and the terms used in the management of said indicators.
4.3. PROBLEM STATEMENT
The judicial power of our country has always prosecuted, has been prosecuting and will surely prosecute personnel who, as a director, official or State worker, have carried out fraud and / or acts of corruption.
The Congress of the Republic has a Control Commission, which has dealt with, deals with, and will surely continue to deal with cases of fraud and corruption in the public sector.
The Office of the Comptroller General of the Republic, as part of its constitutional function, has determined, is determined and will surely continue to find cases of fraud and corruption.
The internal control bodies of state entities have always been carrying out control actions to confirm fraud and / or acts of corruption.
The media: television channels, radios, magazines, newspapers permanently increase their sales thanks to the publication of allegations of fraud and corruption committed by managers, officials and state workers; In this way, complex embezzlements, major institutional frauds and functional crimes are disclosed that the ordinary citizen can only be amazed at the evident ingenuity and “efficiency” with which these people act.
All this panorama leads us to indicate that fraud and corruption have become intangible and amorphous "institutions" that somehow involve managers, officials and workers of the State, the institutions themselves and the State in general.
Given this situation, it has been indicated that corruption is an incurable disease, which is always in fashion in our country and especially in the government sector.
Analysts agree in pointing out that fraud and corruption seem to be institutionalized illegal acts in the institutional work, both in the general government, regional government and local government.
The internal audit, the financial audit, the management audit and the special examinations that are applied in the governmental sector of our country, have not been providing "the vitamin" that the institutions need to adopt a severe policy that is just and determined to not to tolerate the fraudulent and corrupt behavior of managers, officials and workers of the levels of government in our country. Likewise, these types of audits do not present proposals for the design and implementation of a series of procedures, techniques and practices, some of a general nature and others specific that limit fraud and corruption.
On the other hand, it has been observed that the audit teams, of the aforementioned types, have been adopting a lukewarm attitude towards the illegal acts of managers, officials and workers at the government levels, probably not to compromise and maintain harmonious relationship with its government clients, even if it is fictitious.
A real concern in non-comprehensive audits is the absence of technical documentation that requires and determines the role and attitude with which the independent auditor should act in cases where certain acts of corruption are identified with his clients.
Non-comprehensive audits do not have mechanisms for the independent auditor in the professional exercise to determine errors, fraud, illegal acts, embezzlement and in general other acts that could be directly linked to corruption.
4.3.1. GENERAL PROBLEM
What aspects should be considered in the comprehensive audit process, so that this professional tool becomes the effective response against fraud and corruption in regional governments and is also a facilitator of institutional management?
4.3.2. SPECIFIC PROBLEMS
1.- How should the integral audit process and procedures be structured, so that it contributes to the fight against fraud and corruption in regional governments and facilitates the optimization of corporate management?
2.- What control activities does the comprehensive audit recommend to fight fraud and corruption, with which the regional governments could achieve efficiency, effectiveness and economy in the resources they manage, as well as have the trust of the community?
4.4. THEORETICAL FRAMEWORK
4.4.1. REGIONAL GOVERNMENTS
Article 189 of the Political Constitution of Peru establishes that "The territory of the Republic is divided into regions, departments, provinces and districts, in whose constituencies unitary government is exercised in a decentralized and deconcentrated manner"
Decentralization is the transfer to various regions of part of the authority previously exercised by the General Government
Regionalization is the organization of a country with decentralizing criteria.
Deconcentration occurs when a State institution establishes dependencies for the timely and effective fulfillment of its specific objectives, general objectives, mission and institutional vision.
Law No. 27783, which approves the Law of Bases of Decentralization, establishes that decentralization has as its purpose the integral, harmonious and sustainable development of the country, through the separation of powers and functions, and the balanced exercise of power by the three levels. government, for the benefit of the population
Decentralization is sustained and governed by the following general principles: it is permanent, it is dynamic, it is irreversible, it is democratic, it is comprehensive, it is subsidiary and it is gradual. Decentralization will fulfill, throughout its development, the following political objectives: i) Unity and efficiency of the State, through the orderly distribution of public powers and the adequate relationship between the different levels of government and the state administration; ii) Political representation and intermediation towards the national, regional and local government bodies, constituted by democratic election; iii) Participation and supervision of citizens in the management of public affairs in each region and locality; and, iv) Institutionalization of solid regional and local governments. The objectives at the economic level are the following:i) Economic development, self-sustaining and competitiveness of the different regions and localities of the country, based on their vocation and productive specialization; ii) Coverage and supply of basic social services throughout the national territory; iii) Availability of the necessary economic and social infrastructure to promote investment in the different constituencies of the country; iv) Equitable redistribution of State resources; and v) Strengthening of regional and local financing. The objectives at the administrative level are the following: i) Modernization and efficiency of the administration processes and systems that ensure the adequate provision of public services; ii) Simplification of procedures in national, regional and local public agencies; and,iii) Assignment of competencies to avoid unnecessary duplication of functions and resources and avoidance of responsibilities in the provision of services. The objectives at the social level are as follows: i) Education and training aimed at forging human capital, national and international competitiveness; ii) Citizen participation in all its forms of organization and social control; iii) Incorporate the participation of peasant and native communities, recognizing interculturality and overcoming all kinds of exclusion and discrimination; and, iv) Promote human development and the progressive and sustained improvement of the living conditions of the population in order to overcome poverty. The objectives at the environmental level are: i) Land and environmental planning,from the approaches of sustainability of development; ii) Sustainable management of natural resources and improvement of environmental quality; and, iii) Inter-institutional coordination and agreement and citizen participation at all levels of the National Environmental Management System.
Regionalization in accordance with the Law of Bases of Decentralization, is the political division of the country into geoeconomic territorial units, with diverse resources, natural, social and institutional, historically, economically, administratively, environmentally and culturally integrated, which involve different levels of development, specialization and productive competitiveness, on whose constituencies regional governments are constituted and organized.
REGIONAL GOVERNMENTS.
Law No. 27867 is the Organic Law of Regional Governments. This norm establishes the structure, organization, competencies and functions of regional governments. Defines the decentralized and decentralized democratic organization of the Regional Government in accordance with the Constitution and the Law on Bases of Decentralization
The Regional Governments are legal entities under public law, with political, economic and administrative autonomy in matters within their competence, constituting, for their economic and financial administration, a Budgetary Statement.
Regional governments have the essential purpose of promoting sustainable regional development, promoting public and private investment and employment, and guaranteeing the full exercise of the rights and equal opportunities of their inhabitants, in accordance with national, regional and national plans and programs. development premises.
4.4.1.1. CORPORATE MANAGEMENT OF REGIONAL GOVERNMENTS
Corporate management can be defined as the system by which Regional Governments are directed and controlled.
The management of the Regional Governments is carried out through development plans and budgets.
REGIONAL GOVERNMENT MISSION:
The mission of regional governments is to organize and conduct regional public management according to their exclusive, shared and delegated powers, within the framework of national and sectoral policies, to contribute to the integral and sustainable development of the region.
REGIONAL GOVERNMENTS AND REGIONAL DEVELOPMENT:
Regional development includes the coherent and effective application of policies and instruments of economic, social, population, cultural and environmental development, through plans, programs and projects aimed at generating conditions that allow economic growth harmonized with demographic dynamics.
GUIDING PRINCIPLES OF POLICIES AND REGIONAL CORPORATE MANAGEMENT:
The Regional Governments are based on guiding principles of regional policies and management, such as: participation, transparency, modern management and accountability, effectiveness, efficiency, equity, sustainability, impartiality and neutrality, subsidiarity, policy agreement, specialization of functions, competitiveness and integration.
COMPETENCES OF REGIONAL GOVERNMENTS:
The Regional Governments have constitutional powers and exclusive and shared powers established in the Constitution and the Law of Bases of Decentralization.
ORGANIC STRUCTURE:
The direction of the Regional Government is in charge of the Regional Presidency and the executive and administrative functions correspond to the Regional General Manager and the Regional Managers, as established in the Organic Law and the Organization and Functions Regulation approved by the Regional Council.
Regional administration is exercised under a management system and is based on strategic planning, organization, direction, execution, evaluation and control, within the framework of the norms issued by the national administrative systems.
REGIONAL REGULATORY REGULATION:
The norms and dispositions of the Regional Government are adapted to the national legal order, they cannot invalidate or annul norms of another Regional Government nor of the other levels of government.
The Regional Governments, through their governing bodies, dictate the following norms and provisions:
to. The Regional Council: Regional Ordinances and Agreements of the Regional Council.
b. The Regional Presidency: Regional Decrees and Regional Resolutions.
LABOR REGIME OF REGIONAL GOVERNMENTS:
The officials and servants in charge of the Regional Governments are subject to the general labor regime applicable to the public administration, in accordance with the law. The pension system applicable to workers will be in accordance with the Law of the National Pension System or the Private Pension System.
FUNCTIONS:
The functions of the Regional Governments will be exercised subject to the legal order established by the Constitution, the Law of Bases of Decentralization and other laws of the Republic. Among the general functions it develops we have:
a) Normative and regulatory function;
b) Planning function;
c) Administrative and executing function;
d) Investment promotion function
e) Supervision, evaluation and control function
The Regional Governments carry out specific functions regarding:
a) Education, culture, science, technology, sport and recreation;
b) Work, promotion of employment and small and micro-enterprises;
c) Health;
d) Population;
e) Agrarian;
f) Fishery;
g) Environmental and territorial planning;
h) Industry;
i) Commerce;
j) Transportation;
k) Telecommunications;
l) Housing and sanitation;
m) Energy, mines and hydrocarbons;
n) Social development and equal opportunities;
o) Civil Defense;
p) Administration and Awarding of State-owned land;
q) Tourism; and, r) Crafts
REGIONAL ECONOMIC AND FINANCIAL REGIME:
The resources of the Regional Governments are those indicated in the Law of Bases of Decentralization:
a) The movable and immovable property of your property
b) The specific assignments and transfers for its operation, established in the Annual Budget Law.
c) The taxes created by Law in your favor
d) The economic rights generated by the privatizations and concessions they grant, and those they receive from the national government for the same concept
e) The assigned resources of the Regional Compensation Fund
f) The resources assigned by royalty
g) The product of its financial operations and those of internal credit arranged with charge to its own patrimony. External credit operations require the guarantee or guarantee of the State, and are subject to the public debt law.
h) Your own income and others determined by law
4.4.1.2. EFFECTIVE CONTROL OF ACTIVITIES
Within the framework of the modern management and accountability principle, the Regional Public Administration is oriented under a modern management system and subjected to a performance evaluation. The regional governments will incorporate into their action programs concrete mechanisms for accountability to the citizens regarding the progress, achievements, difficulties and prospects of their management. The Public hearing will be one of them. The holders of the regional public administration are managers of the interests of the community and are subject to the established responsibilities.
CONTROL AND DEFENSE OF THE INTERESTS OF THE REGIONAL GOVERNMENT:
AUDIT.- The Regional Government is subject to the permanent supervision of the Congress of the Republic, the Regional Council and the Citizens, in accordance with the Law and the Regulations of the Regional Council.
CONTROL.- Control at the regional level is the responsibility of the Regional Internal Control Body, which functionally and organically depends on the Office of the Comptroller General of the Republic in accordance with the Organic Law of the National Control System and the Office of the Comptroller General of the Republic.
The Regional Control body is headed by a selected official appointed by the Comptroller General of the Republic, through public merit competition. Its scope of control encompasses all the Regional Government bodies and all acts and operations pursuant to Law.
The Head of the Regional Control Body issues annual reports to the Regional Council about the exercise of his functions and the state of control of the use of public resources and funds. These reports are public. The observations, conclusions and recommendations of each control action are published on the Regional Government Portal.
4.4.2. INTEGRAL AUDIT
4.4.2.1. COMPREHENSIVE AUDIT CONCEPTS
The comprehensive audit, according to Canevaro (2004) and Hernández (2002), includes the study and evaluation of operations or transactions, in our case of the Regional Government, in order to validate the different systems that govern: administrative, operational, accounting, management and computerized information, through an appropriate methodology that allows the preparation of work certificates as evidence, including the use of techniques that allow for a logical and coherent order necessary for its review, supervision, continuity of the audit work and for that support your opinion.
According to the authors, the comprehensive audit is based on the following principles: independence, objectivity, permanence, comprehensiveness, opportunity, certification and compliance with regulations.
The phases of comprehensive audit work are planning, execution, and reporting. In addition, advice and monitoring.
The scope of the comprehensive audit considers the administrative and control systems, risk identification, operations and results, financial information, management performance, and compliance and regulation.
The objective of the comprehensive audit is to maximize benefits, staff development, maximize income, increase competitiveness and promote growth.
We share the authors' opinion, when they establish that the comprehensive audit is not the sum of audits. Rather, it is a global coverage model and is therefore not a sum of audits, but the best result of a joint evaluation. Comprehensive audit work is based on International Auditing Standards, Generally Accepted Auditing Standards, Government Auditing Standards, Technical Standards of Internal Control for the Public Sector, Government Auditing Manual and others.
4.4.2.2. INTEGRAL AUDIT PROCESS
Canevaro (2004), Bravo (2000) and Blanco (2001) and other authors, agree in establishing that the comprehensive audit process includes:
a) Planning, b) Development of the planned (execution);
c) Completion of the work and report; and, d) In addition to the basic functions, the advisory function and the monitoring or follow-up function must be considered.
PLANNING PHASE:
Understands:
a) General planning;
b) Detail or specific planning; and, c) Identification of procedures
PHASE OF THE DEVELOPMENT OF THE PLANNED:
It refers to the execution of the audit and includes:
a) Execution of audit programs;
b) Application of audit procedures, techniques and practices;
c) Comparison of the evidence obtained in the working papers with the criteria of the comprehensive audit; and, d) Definition of findings, if applicable.
PHASE OF THE CULMINATION OF WORK:
It consists of presenting the Report of the work carried out. Understands:
1. Introduction
2. Reach
3. Intermediate paragraphs (exceptions to the financial statements, observations on management, observations on compliance with legal regulations, etc…)
4. Opinion
According to Hernández (2002), in addition to the traditional process mentioned above; The following phases would have to be considered:
a) Provision of specialized advice on matters of institutional control; and, b) Follow-up, supervision or minotoreo of the recommendations made
4.4.2.3. COMPREHENSIVE AUDIT PROCEDURES
According to the International Standards on Auditing, the auditor must apply analytical procedures in the planning and global review stages of the audit. Analytical procedures can also be applied at other stages.
Analytical procedures mean the analysis of significant indices and trends including investigation resulting from fluctuations and relationships that are inconsistent with other relevant information or deviate from the forecast amounts.
Analytical procedures include consideration of comparisons of entity information.
Analytical procedures also include consideration of relationships.
Various methods can be used to execute the procedures. These range from simple comparisons to complex analyzes using advanced statistical techniques. The analytical procedures can be applied to the consolidated financial statements, the component financial statements and the individual elements of financial information. The selection of procedures, methods and level of application determined by the auditor is a matter of professional judgment.
In the development of the comprehensive audit, the application of the following verification techniques should be considered:
a) Eyepiece;
b) Oral or verbal;
c) Written;
d) Documentary; and, e) physical
Among these general techniques, specific techniques and practices should be considered to obtain the evidence that supports the Auditor's Report.
4.4.2.3. ADDED VALUE OF THE COMPREHENSIVE AUDIT
Traditionally, the idea that auditing is a part of accounting has been expounded and consequently, its approach towards financial auditing has been skewed. The audit should be understood as a methodological standard, to evaluate different objects or realities, with a critical, analytical and investigative mentality, on an objective and independent and ethical basis, aimed at issuing a report as a final product.
To the traditional process of: audit planning, execution and report formulation; Other functions are currently being added to give added value to the work of the comprehensive audit.
The comprehensive audit in its modern version is an advisor to senior management for the purposes of timely and adequately implementing the internal and external control system and thus printing reliability in financial, economic, tax, administrative, logistics, etc. information., in relation to the accuracy, efficiency, effectiveness and economy of institutional operations.
Another function that is necessary to carry out in the framework of the COSO REPORT is the supervision, follow-up or monitoring of the internal control systems, evaluating the quality of their performance. This monitoring will take the form of continuous supervision activities, periodic evaluations or a combination of the two previous ones.
4.4.3. FIGHT AGAINST FRAUD AND CORRUPTION
Fraud and corruption are not recent issues, they are forever issues. They are current issues. The fight against these scourges is clamored for by every conscious and honest community.
Fraud and corruption are enemies of development.
Modernly, comprehensive auditing does not base the efficiency of its work on the discovery of fraud or acts of corruption that may be occurring in the audited entities. It is sufficient that the audit work is developed based on the auditing standards accepted by the community of auditors, at an international level, so that it can be trusted by those who make use of the audited information. However, it is precisely the integral audit, the one that strictly speaking tends to discover the majority of frauds or acts of corruption of the audited entities, even though this is not the only objective.
The auditor in the performance of his profession has knowledge of various types of operations or transactions, as well as terminology of different meanings that must be defined in order to specify the attitude that should be taken when detecting acts of corruption. In this sense, the auditor can determine errors, fraud, illegal acts, embezzlement and, in general, other acts that could be directly related to corruption.
MISTAKES:
In the context of comprehensive auditing, the term error is used to describe those actions or misstatements or unintentional omissions that the auditor's company, entity, or client might make in the financial, administrative, or other information it examines or the transactions, record or other documents examined, which could include figures, omissions or disclosures not appropriate to the circumstances.
IRREGULARITIES:
The term irregularity is used as a synonym for managerial fraud, embezzlement, embezzlement, etc; that is, all those actions that management or its officers perform intentionally or fraudulently in operations, transactions and / or managerial and administrative decisions that the auditor could identify or discover as part of the examination to include them in the conclusions and recommendations of the report. audit.
The characteristic of the irregularity is the condition of intentional or fraudulent that could be committed by the employees, officials, or even by the management or Board of Directors of the company / entity / Government.
In the environment of comprehensive auditing, the term irregularity, according to SAS 53, the auditor assumes responsibility to detect and report errors and irregularities.
ILLEGAL ACTS:
Illegal acts are violations of laws or government regulations attributable only to the entity. Such acts may have been performed by management or by employees but acting on behalf of the entity, do not include under this definition the inappropriate conduct of the entity's personnel. SAS 54 deals with illegal acts committed by the auditor's clients.
In this context we have other terms such as Fraud and Corruption that are dealt with in greater depth immediately.
4.4.3.1. FRAUD
Includes the intentional distortions of financial, administrative, logistics, accounting, labor, tax and other information by one or more managers, officials and workers. Suppliers, customers, creditors and related third parties also participate in some cases.
According to Pinilla Forero José Dagoberto (2000), currently the greatest number of processes, procedures, techniques and work practices go through the use of computerized systems, therefore, a large part of fraud is being committed in these systems, to which you should examine the comprehensive audit. Here are some of the frauds that typically occur in computer systems:
a) Transaction manipulation;
b) SALAMI technique;
c) Trojan Horse Technique
d) Logic bombs;
e) Pizza Game;
f) Social engineering;
g) Traps- Door;
h) Superzaping;
i) cunning evasion;
j) Garbage collection;
k) Piggybacking to gain unauthorized access;
l) Lift doors;
m) Drill technique;
n) Interception of communication lines
FIGHT AGAINST FRAUD:
According to Hevia (1991), in most companies their most influential liability is the weakness of their control systems, which they invite due to their ineffectiveness to fraud.
Interpreting Hevia, fraud is present to a greater or lesser extent in all regional governments, whatever their size or activity. Based on this unquestionable reality, governments should adequately protect themselves from this danger.
The fight against fraud in a regional government is not a function that corresponds to a certain unit or department; it is the task of each and every one of its managers and employees.
If there is no rule, instruction or written procedure regarding fraud, there is no concrete and duly institutionalized and well-known policy on fraud, therefore, the integral audit must establish the recommendations of the case, within the framework of its advisory function.
Regional governments must be very knowledgeable about the motivations and incentives for fraud and act accordingly.
The creation of information sources within the regional government, encouraging all staff to collaborate in the fight against fraud, through the channels established for this purpose, is something that should be considered and not rejected.
All the precautions and measures in place to fight fraud must be known and disseminated within the regional government.
The fight against fraud is a duty imposed on the Directors, in defense of the interests of the State and Society.
The essential component of good corporate governance in a regional government is a fraud deterrence, detection, investigation and information system, appropriate to the needs and characteristics of each government.
Transparency is the best antidote to fraud; By transparency we understand that everyone is informed of the activities and operations of the regional government. Transparency is the opposite of widespread occultism that is erroneously applied by some authorities, thus facilitating the development of fraud.
4.4.3.2. CORRUPTION
Unlawful actions practiced by people, officials or businessmen that compromise the honor of the official or public servant to obtain from him a generally economic benefit in his favor or for the own benefit of the entity or company he represents and results in the incorrect use of state resources.
Robert Keitgaard in his book "Controlling Corruption" presents a definition taken from "Webster's Third New International Dictionary" in the following terms: "… corruption is conduct that deviates from the formal duties of a public role for interest gains private (personal, family or group) pecuniary or related to status, or that violates the rules against the exercise of certain types of conduct of private interest ”.
As in the Latin word corruptus, "corrupt" invokes a range of images of evil; designates that which destroys the healthy. There is a moral tone to the word.
One of the characteristics of corruption is that it is generally carried out by the company, the government or the official for their own benefit. Normally a public official participates because he is the key person in an act of corruption. In transactions with regional governments, unfortunately it is the private company that generally participates in one way or another in corruption, for example by submitting unrealistic contributions, by paying perks to win the Bueno Pro and other acts.
The criminal legislation of almost all countries considers that corruption involves two elements: active and passive corruption, the first includes those who corrupt or try to corrupt an official or public servant because he is the one who receives gifts, promises or advantages from any class to do or omit something in violation of its obligations; and the second is the official or public servant because she is the one who requests or accepts a donation, promise or any other advantage to perform or omit an act in violation of her obligations or who accepts them as a consequence of having failed in her duties. Also the public official or servant who directly or indirectly or by simulated act, is interested in any contract or operation in which she intervenes by reason of her position.
NATURE AND SCOPE OF THE CONCEPT OF CORRUPTION:
In relation to the work of the comprehensive audit, the auditor should be alert to identify acts of corruption. Although we remember that it is not the objective of the auditor's work to identify fraud, errors or acts of corruption, we consider that it is your responsibility to take an active role in cases where you observe the possibilities that your client is committing acts of corruption that, as mentioned above, they are acts that go beyond an illegal act.
4.4.3.3. EFFECTS OF FRAUD AND CORRUPTION
According to Brión (2001), there is no doubt that a company is not in itself fraudulent or corrupt. They are the people who are in charge of the management and, therefore, must assume responsibility for the acts of the same, although sometimes they try to ignore certain acts in order to dilute their responsibilities.
CAUSATION IN CORRUPTION AND FRAUD:
The good and the bad of a company is inextricably associated with the good and the bad of the people who run or work in it. That is to say, it is a moral good or a bad and, therefore, derived from a person's attitude towards life.
RE-EDUCATION TO FIGHT CORRUPTION:
It is evident that fraud and corruption can only be successfully discouraged if, in addition to the implementation of adequate controls in the different processes, the evaluation of the ethics of the people who act in these processes is promoted.
Remember that a "control ends when two people agree to violate it." In fraud and corruption the same thing happens, meeting with figures such as collusion or complicity.
The auditor who participates in the comprehensive audit of a Regional Government, should be the most suitable person to help re-educate the organization, based on the reassessment of the ethical principles that must be supported by the people who interact with it. But this is only possible if the auditor is considered an “example or model” from that ethical perspective, a fact that in itself represents a challenge beyond the function.
The direct influence of the leaders of the Regional Governments as pillars of change is fundamental for institutional re-education and therefore as a means to combat the scourge of corruption. People are very sensitive in the perception of the messages and image of the leaders. If you want to change, you have to change at all levels.
If we can change the values of the people, we will have changed the values of the group and, in this way, the effects of fraud and corruption can be controlled.
TOWARDS A GENERAL THEORY OF CORRUPTION IN REGIONAL GOVERNMENTS:
According to Calden (1992), since the dawn of civilization, it has been recognized that any individual in the position of exercising public power over the collectivity or community and with public authority is tempted to use public offices for personal gain and advantage.
In regional governments, the main actors in corruption may be managers, officials and workers. The way they can act can be through: Bribery and complicity; Collusion to defraud the public; Embezzlement of funds; economic privileges according to special interests; Favoritism and discrimination; Parasitism; etc.
The history of corruption can be found in economic dependency; multidimensional value system; decomposition of the system; social insecurity, incorrect administration and incompetence; gossip and rumor, etc.
Public officials who are complacent to corruption are determined to win until they are captured and punished. For them, corruption provides dividends. They can accumulate power and exercise it with few restrictions. They can live exceptionally privileged lives, protect their lives, and perhaps amass enormous private fortunes. They can preserve themselves in office and predetermine their succession, perhaps even creating a dynasty. They can and do things that they want and impede other people to obtain anything. The advantages in status, wealth and power are quite clear. But your gains are by definition unnatural benefits that might not have happened. Their winnings are made at the expense of someone else, although those who lose may never understand that they have denied them what should have been theirs.
Official corruption is difficult to control. It is a complex problem involving many factors and different forces. It takes many different forms, and no regional government or truly any public official is immune.
4.5. HYPOTHESIS
VARIABLES OF THE INVESTIGATION
1) INDEPENDENT VARIABLE:
X. COMPREHENSIVE AUDIT
INDICATORS:
X.1. PROCESS, PROCEDURES, CRITERIA AND POLICIES
X.2. EFFICIENCY, EFFECTIVENESS AND ECONOMY
2) DEPENDENT VARIABLE:
Y. FIGHT AGAINST FRAUD AND CORRUPTION
INDICATORS:
Y.1. FRAUD AND CORRUPTION
Y.2. CONTROL ACTIVITIES
3) INTERVINENT VARIABLE:
Z. REGIONAL GOVERNMENTS
INDICATORS:
Z.1. CORPORATE MANAGEMENT
Z.2. EFFECTIVE CONTROL
4.5.1. MAIN HYPOTHESIS
The comprehensive audit to be the effective response that regional governments need in the fight against fraud and corruption, must consider, in addition to its normal process, activities that give added value to this professional activity, such as specialized advice in the framework of the new paradigms of control and monitoring of the observations made.
4.5.2. SECONDARY HYPOTHESES
1. The comprehensive audit, in order to contribute to the fight against fraud and corruption in the regional governments, must be carried out on the basis of the procedures, criteria and policies that take into account the multisectoral activity of these governments and the degree of responsibility that they have before the executive and legislative power.
2. Control activities consist of policies and procedures that tend to ensure that established guidelines are followed; they are carried out in any regional sector and in all functions. They comprise a series of activities such as approvals, authorizations, verifications, reconciliations, analysis of operations, safeguarding of assets, segregation of duties and others. with these activities it is feasible to achieve efficiency, effectiveness and economy.
4.6. JUSTIFICATION AND IMPORTANCE OF WORK
4.6.1. JUSTIFICATION
Fraud and corruption are almost institutionalized illegal acts in the work of government levels. To deal with such acts, senior management, in our case of regional governments, must make use of an extraordinary institutional management and control tool, such as a comprehensive audit. The comprehensive audit, insurance in addition to evidencing the institutional processes and procedures, will provide the recommendations required by regional governments to adopt a severe, fair and determined policy not to tolerate fraudulent behavior and corruption in these institutions by managers, officials and workers in these institutions that have just been created in our country.
The comprehensive audit will provide regional governments with mechanisms to overcome the slowness and complexity of administrative processes and especially to overcome the prevailing confusion in the processes, the disorganization, the apathy of the personnel in charge and the counterproductive administrative measures that make the process slow and winding instead of more efficient and agile.
The comprehensive audit will provide advice for the implementation of modern and efficient government financial management practices, better internal controls and to improve the role of internal control bodies.
Traditional audits have proven to be weak and unable to professionally detect and deal with government fraud and corruption; therefore, the integral audit appears as the alternative to strengthen, modernize and improve the work of the auditors, so that they contribute to fight against these scourges that break the morale of honest workers and especially of the community that contributes to the State.
The comprehensive audit will go on to play an important and decisive role in identifying and disclosing those practices of fraud, bribery and in general acts of corruption that you could identify as part of the application of its specialized procedures, techniques and practices.
Undoubtedly, the best contribution that the comprehensive audit team will provide to the regional government will be the strengthening of the internal control system that exists and that must be strong enough to automatically identify errors or as part of the accounting system. irregularities, illegal acts and in general fraud and all those acts that may be classified as corruption.
Corruption is a widely used term. It is also true that very little has been done to combat it with energy and determination, especially by the auditors; therefore, through the comprehensive audit, it is the great historical opportunity for the profession to have a more active participation and to leave, once and for all, that warm and complacent performance that has sometimes been taken in the exercise of other audits, before acts of corruption that have identified professional work.
4.6.2. IMPORTANCE
The relevance of this research work lies in the conversion of the passive attitude to an active, protagonist attitude, in the fight against fraud and corruption, by the auditors and managers of regional governments. In an environment where we know there is corruption, but no one dares to report it or report it, this type of attitude is relevant.
The importance is also given insofar as it allows postgraduate professionals to have the opportunity to express our opinion on the need to end corruption, using in this case a tool such as comprehensive auditing.
V. OBJECTIVES
5.1. MAIN GOAL
Formulate the criteria under which comprehensive auditing must be carried out in regional governments; in such a way that it is the effective tool against fraud and corruption and contributes to recovering the confidence of the rest of the public sector and especially of the community.
5.2. SPECIFIC OBJECTIVES
1. Recommend the process, procedures, criteria and policies that the comprehensive audit should apply, so that it is an effective tool against fraud and corruption in regional governments and also contributes to the optimization of its corporate management.
2. Recommend the most effective control activities to prevent fraud and corruption in regional governments, which would facilitate the rational use of resources and achieve the objectives established in the regulations and demanded by the community.
SAW. METHODOLOGY
6.1. KIND OF INVESTIGATION
This research work will be of the basic or pure type, since all aspects are theorized, although its scope will be practical to the extent that Comprehensive Auditing is considered as an effective tool to fight fraud and corruption by governments. Regional
6.2. INVESTIGATION LEVEL
The investigation to be carried out will be at the descriptive-explanatory level, since the process, procedures, criteria and policies of the Comprehensive Audit will be described and it will explain how it becomes the effective tool to fight fraud and corruption.
6.3. INVESTIGATION METHODS
The following methods will be used in this investigation:
1) Descriptive.- Because the process, procedures and report will be described, as well as the advice and follow-up of the comprehensive audit that would be applied in regional governments as part of the fight against fraud and corruption.
2) Inductive.- To infer the information of the sample in the research population.
6.4. DESIGN OF THE INVESTIGATION
The research population is made up of the elected authorities, officials and workers of the Regional Governments of our country; The staff of the Office of the Comptroller General of the Republic, the staff of the Audit Societies and the teaching staff of the Audit Subject of Public and Private Universities will also be taken into account.
6.6 SAMPLE OF THE INVESTIGATION
The sample of the investigation will be made up of the elected authorities (03 Presidents and 09 Councilors), officials (10) and workers of the Regional Governments of Lima - Provinces (05 workers of the Internal Control Body) and the Regional Government of Callao (05 workers of the Internal Control Body); Also in the sample will be 8 specialists from the Office of the Comptroller General of the Republic, the Principal Partners of five Audit Societies that operate in Lima (10 people) and 10 Audit professors from the Public and Private Universities that operate in Lima. In total there will be 60 people who will be called upon to provide us with the necessary elements for the investigation.
6.7. DATA COLLECTION TECHNIQUES
The techniques that will be used in the investigation will be the following:
1) Interviews.- This technique will be applied to the authorities and officials of the Regional Governments, Comptroller General of the Republic, Audit Societies, in order to obtain information on all aspects related to the investigation.
2) Surveys.- Workers of the Regional Governments, General Comptroller of the Republic and Teachers of the Public and Private Universities will be applied, in order to obtain information on the aspects related to the investigation.
3) Documentary analysis.- This technique will be used to analyze the norms, bibliographic information and other aspects related to the investigation.
6.8 DATA COLLECTION INSTRUMENTS.
The instruments to be used in the research are related to the aforementioned techniques, as follows:
6.9. ANALYSIS TECHNIQUES
The following techniques will be applied:
• Documentary analysis
• Inquiry
• Data reconciliation
• Tabulation of tables with quantities and percentages
• Graphics understanding
6.10. DATA PROCESSING TECHNIQUES
The following data processing techniques will be applied:
• Sorting and classification
• Manual registration
• Computerized process with Excel
• Computerized process with SPSS
VII. TENTATIVE SCHEME OF THE THESIS
TITLE OF THE THESIS
AUTHOR'S NAME
INTRODUCTION
PART I:
METHODOLOGICAL AND THEORETICAL APPROACH
CHAPTER I:
METHODOLOGICAL APPROACH
1.1. Bibliographic Background
1.2. Approach to the opportunity or problem
1.2.1. Description of the problematic reality
1.2.2. Main problem
1.2.3. Secondary problems
1.2.4. Delimitation of the investigation
1.3. Justification and Importance
1.3.1. Justification
1.3.2. Importance
1.4. goals
1.4.1. Main goal
1.4.2. Specific objectives
1.5. Hypothesis
1.5.1. Main hypothesis
1.5.2. Secondary hypotheses
1.6. Methodology
1.6.1. Kind of investigation
1.6.2. Research level
1.6.3. Research methods
1.6.4. Design of the investigation
1.6.5. Population and sample
1.6.6. Techniques and instruments
CHAPTER II:
THEORETICAL APPROACH
2.1 Background of the investigation
Historical review
Legal basis of the investigation
Conceptual framework
Regional government
Integral audit
Fight against Fraud and Corruption
PART II:
RESULTS OF THE INVESTIGATION
CHAPTER III:
PRESENTATION, ANALYSIS AND INTERPRETATION OF THE INTERVIEW CONDUCTED
3.1. Presentation of the interview
3.2. Analysis of the interview
3.3. Interpretation of the interview
CHAPTER IV:
PRESENTATION, ANALYSIS AND INTERPRETATION OF THE SURVEY CONDUCTED
4.1. Presentation of the survey
4.2. Survey Analysis
4.3. Interpretation of the survey
CHAPTER V:
CONTRACTING AND VERIFICATION OF THE PROPOSED HYSPOTESIS
5.1. Hypotheses raised
5.2. Results obtained
5.3. Verification and verification
CHAPTER VI:
CONTRASTING AND VERIFICATION OF THE OBJECTIVES SET
6.1. Planted objectives
6.2. Results obtained
6.3. Verification and verification
PART III:
OTHER ASPECTS OF THE INVESTIGATION
CHAPTER VII:
CONCLUSIONS AND RECOMMENDATIONS
7.1 Conclusions
7.2 Recommendations
BIBLIOGRAPHY
ANNEXES
VIII. SCHEDULE
IX. FINANCING
X. BIBLIOGRAPHY
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7. PUBLICSO COLLEGE OF ACCOUNTANTS OF LIMA (1992) Magazine: “Fraud and Corruption enemies of development”. Lima Peru. It is a publication of the CCPL.
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