Internal regulations for government auditing in the Dominican Republic

INTERNAL STANDARDS FOR GOVERNMENT AUDIT

The Office of the Comptroller General of the Republic has started the path to modernization with the implementation of the Internal Governmental Auditing Standards (NIAGU), which in itself constitutes an important step in the control and supervision of financial activities carried out by centralized institutions., decentralized and autonomous that make up the set of executing and generating entities of the national budget.

The interest in creating the bases of the regulations for an efficient audit as an internal control body and in the framework of the new times, compiling the standards of the International Organization of Supreme Audit Institutions (INTOSAI) and the indications of the Organization Latin American and Caribbean Supreme Audit Institutions (OLACEFS), from which we have extracted an important part of the standards included here, as well as from other sister institutions, whose texts have been abbreviated in order to obtain a product capable of, in tight synthesis, contain the instruments that we must require to carry out the inspection activities, which in the internal order, the laws have placed under our responsibility.

The institutionality of the Office of the Comptroller General of the Republic is strengthened in a particular way and that of the country in a general sense, with the circulation of the Internal Government Auditing Standards (NIAGU).

LIC. SIMON LIZARDO MOSQUE

Comptroller General of the Republic.

CONCEPTUAL FRAMEWORK

I.- Government Audit

Government Audit is the objective, systematic and professional examination of financial and / or administrative operations, carried out after their execution, in public sector institutions. After the audit is completed, the Comptroller General will send a report to the highest ranking official of the audited institution and a copy to the President of the Republic.

It must be carried out in accordance with the Internal Governmental Auditing Standards and specialized provisions issued by the Office of the Comptroller General of the Republic, applying the techniques, methods and procedures established by the public accountant profession.

Its objectives are:

Evaluate the correct use of public resources, verifying compliance with regulatory legal provisions Determine the reasonableness of financial information Determine the degree to which the planned objectives have been achieved and the results obtained in relation to the resources assigned and compliance of the Institution's approved plans and programs Recommend measures to promote improvements in public management Strengthen the Institution's internal control system.

1. CONCEPTUAL FRAMEWORK

The Government Audit is the responsibility of the auditors of the Office of the Comptroller General of the Republic, the Chamber of Accounts and the Authorized Public Accountants.

The Government Auditor is the professional who meets the necessary requirements to perform the audit work in public sector institutions subject to the Internal Standards on Government Auditing (NIAGU).

The government audit is internal when it is carried out directly by the Comptroller General of the Republic.

It is external when it is exercised by the Chamber of Accounts and by Authorized Public Accountants.

The government audit process comprises the stages of: (i) planning, (ii) execution, and (iii) preparation of the report. It begins with the formulation of the respective plan and ends with the submission of the report to the head of the Institution under review and a copy to the President of the Republic.

The preparation and presentation of the audit report or special examination is the joint responsibility of the auditor in charge and the supervisor.

2.- Types of Audit

The government audit, the type of which is defined

Governmental

Due to its objectives, it is classified as financial audit and performance or management audit.

Financial Audit CONCEPTUAL FRAMEWORK

The financial audit, in turn, includes the audit of financial statements and the audit of budget execution reports.

The objective of the audit of financial statements is to determine whether the financial statements of the audited Institution reasonably present its financial situation, the results of its operations and its cash flows in accordance with generally accepted accounting principles. This type of audit is carried out in Decentralized and Autonomous Institutions.

The audit of Budget Execution reports is applied to centralized institutions with the purpose of determining whether the execution of the budget is presented in accordance with established or expressly declared criteria.

The Generally Accepted Auditing Standards and the International Auditing Standards that govern the accounting profession in the country are applicable to all aspects of financial auditing.

Management audit

Its objective is to evaluate the degree of economy, efficiency and effectiveness in the management of public resources, as well as the performance of State servants and officials, regarding the fulfillment of the programmed goals and the degree to which the results are being achieved or benefits provided by budget legislation or by the Institution that has approved the corresponding program or investment.

The performance audit may have, among others, the following purposes:

CONCEPTUAL FRAMEWORK

1.- Determine if the Institution acquires, protects and uses its resources economically and efficiently.

2.- Establish the causes of inefficiencies or uneconomic practices.

3.- Evaluate whether the objectives of a program are appropriate, sufficient or pertinent and the degree to which it produces the desired results.

Generally, at the end of a performance audit, the auditor does not express an opinion on the comprehensive level of such management or the performance of the officers. Therefore, these standards do not provide for an opinion of this nature to be required of the auditor. However, the auditor must present in his report, findings and conclusions regarding the magnitude and quality of the management or performance, as well as in relation to the specific internal processes, methods and controls, the efficiency or effectiveness of which he considers capable of being improved. If he considers that there are possibilities for improvement, the auditor should recommend appropriate corrective measures.

Special Audit

Special Audit is an audit that can comprise or combine the financial audit of a scope less than that required for the issuance of an opinion in accordance with generally accepted auditing standards with the performance audit intended, either in a generic or specific way, to the verification of the management of the budgetary resources of a given period, as well as compliance with the applicable legal provisions.

CONCEPTUAL FRAMEWORK

It also has as specific objectives, among others, to determine if the budget planning and formulation has been carried out based on the goals established in the Institution's work plans, to evaluate the degree of compliance and efficiency of budget execution, in relation to the provisions that regulate it and the fulfillment of the established goals and objectives, as well as determining the efficiency, reliability and timeliness with which the budget of the Institutions is evaluated.

Likewise, Special Audits will be carried out to investigate complaints of various kinds and exercise control over the donations received, as well as the bidding processes, public debt and compliance with government management contracts, among others.

INTERNAL STANDARDS FOR GOVERNMENT AUDIT

The Internal Governmental Auditing Standards are classified into four groups:

1.- General Standards: Technical training and professional capacity, independence, care and professional dedication, confidentiality, participation of professionals and / or specialists, and quality control.

2.- Norms related to Government audit Planning : General planning, specific planning, audit programs and permanent file.

3.- Norms related to the Execution of the Government Audit: Study and evaluation of internal control, evaluation of compliance with legal and regulatory provisions, supervision of audit work, sufficient, competent and relevant evidence, working papers, communication of observations and representation letter.

4.- Norms regarding the Government Audit Report: Written form, timing of the report, presentation of the report, content of the report and special report.

GENERAL RULES

The Standards that make up this group are related to the qualities and qualifications of the auditor and the quality of their work.

These standards, which also apply to the execution of the work and the preparation of the report, refer to technical training and professional capacity, independence, care and professional dedication, confidentiality, participation of professionals and / or specialists and quality control.

The personnel of the Office of the Comptroller General of the Republic must have extensive knowledge of the public sector, including aspects such as the powers of the Legislative Power, the legal and institutional rules that regulate the functioning of the executive and the statutes by which companies are governed. public. Likewise, the personnel specialized in auditing must have sufficient knowledge of the auditing standards, systems, procedures and practices used by the Comptroller's Office.

The Office of the Comptroller General of the Republic must adopt policies and procedures for the preparation of manuals and other types of written guides and instructions regarding the performance of audits.

Technical Training and Professional Capacity.

The government auditor must possess adequate technical training, the experience and professional competence necessary for the execution of their work.

Technical training constitutes preparation in audit techniques and constant professional updating, as well as the development of skills necessary to ensure the quality of the audit work.

In order to achieve compliance with this Standard, the Office of the Comptroller General of the Republic must promote and carry out training programs in techniques necessary to guarantee the professional capacity and suitability of the personnel participating in the government audit process.

Professional competence is the quality that characterizes the auditor by the level of suitability and professional ability that he holds to carry out his work in accordance with the requirements and demands of the audit work.

The staff must also have extensive knowledge of government auditing and the unique or specific environment in which the audited Institution operates, in relation to the nature of the audit to be performed.

In order to comply with this norm, the Office of the Comptroller General of the Republic will establish a continuing education and training program through the National Control School and other organizations, in order to guarantee that its personnel will maintain their professional capacity. Supervisors and auditors responsible for planning, directing, or executing government audits must complete, each year, at least 80 hours of continuing education and training that strengthen their professional competence. If the audited institution operates in a specific or peculiar environment, the auditors should receive training related to that environment.

GENERAL RULES

Independence

The auditor must adopt an attitude of independent judgment with respect to the Institution under examination and will remain free from any situation that could be indicated as incompatible with its integrity and objectivity.

The independence of criteria is the quality that allows us to appreciate that the judgments made by the auditor are based on objective elements of the aspects examined.

The auditor should consider not only whether he is independent and whether his attitudes and activities allow him to proceed accordingly, but also whether there is reason that could lead others to question his independence. It is essential not only that auditors are in fact independent and impartial, but also that they are so considered by third parties.

You must refrain from participating in the performance of an audit in the event of incompatibility or manifest conflicts of interest.

The auditor will be free from personal and professional impediments to guarantee an impartial and objective work in the examined institution. He is prevented from participating in the execution of control actions in the institution where he has worked previously and that includes areas and / or aspects in which he directly or indirectly intervened or participated.

The government auditor is prevented from receiving benefits in any form, for himself or for another, from natural or legal persons linked to the institution in which the audit action is carried out.

GENERAL RULES

The auditor may not issue an opinion, intervene or participate in acts of decision, management or administration of the institution where he performs his audit.

The Comptroller General of the Republic will establish the appropriate mechanisms that duly protect the independence of the auditor, including the presentation of a personal manifestation of independence.

Care and dedication

Professional The auditor must act with due professional care in order to comply with the auditing standards during the performance of his work and in the preparation of the report.

Due care and professional care means correctly using judgment in determining the scope of the audit and in selecting the audit methods, techniques, tests and other procedures to be applied in the audit.

It also implies that based on your good judgment, you correctly apply the tests and other audit procedures and evaluate the results for the preparation of the corresponding report.

The auditor acquires the capacity, maturity of judgment and necessary skill based on constant practice, under adequate supervision and permanent training.

GENERAL RULES

The higher hierarchical levels will ensure that the personnel under their charge maintain a performance and functional conduct in accordance with the Internal Governmental Auditing Standards. In the event of a non-compliance or violation, they must inform the competent officials of said acts in order for the corresponding corrective measures to be applied.

Confidentiality.

The government auditor must maintain absolute confidentiality regarding the information that he learns in the course of his work.

Confidentiality entails maintaining strict confidentiality regarding the process and results of the audit, not revealing the facts, data and situations that are known to the auditor for the exercise of his professional activity

Information related to the examination may only be accessed by personnel directly linked to the management and execution of the audit work.

Policies aimed at ensuring due confidentiality will be established in the Comptroller General of the Republic. This obligation will subsist even after the auditors and supervisors or other personnel who have had access to the information cease to function.

The government auditor must carry out his professional activities in accordance with the Code of Professional Ethics.

GENERAL RULES

Participation of professionals and / or specialists.

Professionals and / or specialists who carry out their activities in fields other than government auditing will integrate the audit team, as support, when their services are considered necessary for the development of the examination. If relevant, the results of their work will be included in the report and as annexes to it.

Professionals and / or specialists are natural or legal persons, who have suitability, knowledge and experience in a certain technical field other than the exercise of government auditing, whose services may be used according to the objectives and scope of the examination.

When the work of the indicated specialized support staff is required, the auditor, prior to their incorporation, must ensure their competence and ability in their respective specialties.

They will carry out their work under the direction of the auditor in charge, being obliged, under responsibility, to subject their actions to the Internal Standards of Government Auditing as applicable. They will periodically present progress of their work, having to prepare a documented report that includes the respective conclusions, observations and recommendations, in accordance with the objectives of the examination and current regulations.

GENERAL RULES

QA.

The Office of the Comptroller General of the Republic will maintain an adequate internal quality control system that allows it to offer reasonable assurance that the audit is carried out in accordance with the objectives, policies, standards and procedures of government auditing.

Quality control is the set of policies and procedures, as well as specialized technical resources to ensure that audits are performed in accordance with internal government auditing standards.

An appropriate internal quality control system must allow reasonable assurance that: (i) internal government auditing standards are met, (ii) adequate audit policies and procedures have been established, (iii) compliance requirements are met. professional quality and (iv) documented training and supervision is carried out.

An internal quality control system includes the establishment of policies and procedures regarding:

General quality controls, related to the development of basic technical normative instruments for the execution of the government audit; selection, training and training of auditors; and personal qualities. Controls during the development of the audit, relative to the supervision of the work delegated to suitable personnel; direction on the work team, with adequate instructions; and inspection regarding the degree of application of the procedures designed to maintain the quality of the audit work.

GENERAL RULES

Controls after the completion of the audit, related to the establishment of policies and procedures to confirm that the quality control procedures have worked satisfactorily and to ensure the quality of the reports.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

The purpose of this group of standards is to establish the general technical criteria that allow proper planning of the audit in institutions subject to the supervision of the Comptroller General of the Republic, in order to achieve the proposed objectives.

The norms that are presented in the following sections refer to: General planning, specific planning, audit programs and permanent archiving.

General planning

The Comptroller General of the Republic will plan its audit activities through its annual plans, applying criteria of materiality, economy, objectivity and timeliness, and will periodically evaluate the execution of its plans.

The annual government audit plan is the document that contains the set of audit activities and the universe of Institutions and / or areas, as appropriate, to be examined during a one-year period and will be prepared in accordance with the established policies and provisions. by the Comptroller General of the Republic.

The aforementioned plan is of a reserved nature, for which purpose the relevant levels will adopt security measures being the obligation of the personnel linked to the audit actions, to maintain absolute confidentiality of its content.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

The Comptroller General, in use of the powers conferred by Organic Law No. 3894 that the standard, dictates the policy guidelines that govern the planning of the government internal audit in harmony with the annual internal audit plans of the institutions subject to being audited.

In the Comptroller General of the Republic, each line organic unit will plan its actions annually. In the case of institutions subject to control, it will be carried out by the person in charge of the internal audit unit, according to the priorities established for the achievement of institutional or sectoral objectives and goals as the case may be.

The annual internal audit plans will be flexible in order to allow changes that prior authorization is deemed necessary to make according to the circumstances.

The aforementioned plans will be consolidated in the so-called Annual National Government Internal Audit Plan and will be prepared in accordance with the objectives and institutional policy guidelines of the National Plan approved by the Comptroller General of the Republic.

The structure of the content of the plans will be in harmony with the objectives and institutional policy guidelines of the National Plan approved by the Comptroller General of the Republic.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

The Comptroller General and the Internal Audit units that make up the System will periodically evaluate the execution of the Annual Internal Audit Plans, preparing the corresponding Report.

Specific planning

The auditor's work must be adequately planned in order to ensure the performance of a high-quality internal audit and must be based both on knowledge of the activity carried out by the institution to be examined and of the legal provisions that affect it.

Planning an audit implies developing a general strategy for its conduct in order to ensure that the auditor has a thorough knowledge and understanding of the activities, control and information systems and legal provisions applicable to the institution, which allow him to assess the level of audit. audit risk as well as to determine and schedule the nature, timing and scope of the procedures to be applied.

The planning of the audit should include the evaluation of the results of the management of the institution to be examined, in relation to the objectives, goals and planned programs.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

The information the auditor needs to plan the internal audit varies according to the objectives of the internal audit and the institution under review. A preliminary study of the institution can be carried out before preparing the plan to execute the field work. The preliminary study is an effective support method in selecting the specific areas to be audited and in obtaining information to be used in planning. It is a process that allows to quickly obtain information on the organization, programs, activities and functions of the institution, although without subjecting it to a detailed verification.

At the conclusion of the collection and study of information, the auditor will document his work by:

Description of the institution's activities, summarized in the work papers, supported by the documentation obtained from the institution, such as flow charts on the procedures of the most significant areas, etc. Issuance of a Planning Memorandum whose basic structure will contain: Objectives of the examination: are the results that are expected to be achieved. Scope of the examination: extent of the audit work that includes areas, aspects and periods to be examined. Description of the institution's activities.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

Regulations applicable to the institution, especially related to the subject areas of assessment. Reports to be issued and due dates. Identification of critical areas defining the type of tests to be applied. Important matters. Important situations to take into account during the conduct of the examination, including complaints. Personnel, name and category of the auditors that make up the audit team. Likewise, the tasks assigned to each one, according to their capacity and experience Officials of the institution to be examined Time budget, by categories, areas Participation of other professionals and / or specialists, according to the areas subject to evaluation.

Responsibility for the preparation of the Planning Memorandum rests with the auditor in charge and the supervisor; the review and approval at the competent managerial levels.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

In the case of institutions subject to supervision, the person in charge of the Internal Audit department will approve the Planning Memorandum.

Audit Programs.

For each government audit, specific programs should be prepared that include objectives, scope of the sample, detailed procedures, and timing of their application; as well as the personnel in charge of its development.

The audit programs include an orderly list of procedures to be applied in the audit process, which allow obtaining competent and sufficient evidence to achieve the achievement of the established objectives.

They are developed from the knowledge of the institution and its systems. The auditor relies on this knowledge to establish the nature, timing and scope of the procedures to be applied.

Its flexibility should allow modifications, improvements and adjustments that in the opinion of the auditor in charge and supervisor are considered pertinent during the audit course.

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

Audit programs guide the auditor's action and serve as an element to control the work performed. They must also allow the evaluation of the progress of the examination and the correct application of the procedures, so that the achievement of the results is in accordance with the proposed objectives.

The audit program should be sufficiently detailed to serve as a guide and as a means of monitoring the proper execution of the work.

Responsibility for the preparation of the respective programs corresponds to the auditor in charge and supervisor.

Archive

Permanent For each institution subject to control, the permanent file must be established, organized and updated.

The permanent Archive is made up of an organic set of documents that contain copies and / or extracts of information of interest, of continuous use or necessary for future examinations, basically related to:

Organic Law of the institution and legal norms that regulate its operation Organization chart approved Organization and functions regulations approved Organization and functions manual approved Procedures manual approved Flowcharts of the main activities of the institution Institutional operating plan

RULES RELATING TO THE PLANNING OF THE GOVERNMENT INTERNAL AUDIT.

Institutional budget, including modifications and evaluations Financial Statements or budget execution report Audit Reports Reports Annual Control Plan, including reprogramming Annual plan evaluation report summarizing the most important decisions adopted Resolutions and circulars issued by the institution Agreements and Contracts.

It will be updated regularly to allow easy updating, especially in the planning phase of audits.

The responsibility of organizing the Permanent Archive corresponds

To the administrative and legal areas of the Comptroller General To the Internal Audit departments of the institutions subject to control and

Scope of Work on Compliance and Internal Controls

The auditor should report the extent of his tests on compliance with laws, regulations and internal controls. If the tests do not exceed those that the auditor considers necessary for an audit of financial statements or budget execution report, it will be sufficient for the auditor

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Declare that you performed tests on compliance with certain laws and regulations, that you obtained an understanding of internal controls and that you evaluated the control risks.

The standards set forth below refer to: study and evaluation of internal control, evaluation of compliance with legal and regulatory provisions, supervision of audit work, sufficient, competent and relevant evidence, working papers, communication of observations and letter representation.

Study and evaluation of internal control.

An appropriate study and evaluation of internal control must be carried out to identify the critical areas that require an in-depth examination, determine their degree of reliability in order to establish the nature, scope, timing and selectivity of the application of audit procedures.

The internal control system comprises the organizational plan, the methods, procedures and the internal audit function established within a public institution, to safeguard its assets against waste, loss and improper use, to verify the accuracy and veracity of financial information. and administrative, promote efficiency in operations and verify compliance with institutional objectives and policies, as well as applicable regulations. An appropriate internal control system also makes it possible to detect possible deficiencies and those aspects related to the existence of illegal acts, if applicable.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The Administration of the Institution is responsible for implementing and maintaining an effective internal control system, whose structure includes:

Control environment, which refers to the general disposition, vigilant attitude and actions taken by the administration with respect to control and its importance for the institution.Information and registration systems, consists of the methods and records established to identify, collect, analyze, classify, record and report the institution's transactions. Control procedures consist of the additional policies and procedures established by the administration to achieve reasonable assurance that the specific objectives of the institution will be achieved.

The purpose of the study and evaluation of the internal control system is to know more precisely those aspects of importance of the organization and operation of the institution, as well as to make adjustments to the programs and the detailed application of audit procedures, especially in the critical areas, which will serve as the basis for the establishment of the audit objectives and scope, the formulation of recommendations to be considered in the report and the determination of the degree of confidence of the controls implemented by the institution.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The study and evaluation of the internal control system must be carried out according to the type of audit that is executed, be it financial, management or special audits.

The auditors may evaluate, to the extent necessary to meet the audit objectives, those policies, procedures, practices and controls that are applicable to the programs, functions and activities that are the subject of the audit.

The collection of information from the internal control system must be properly documented, taking into account the way in which the information is presented and the auditor's judgment.

The evaluation of the internal control system comprises two stages:

Obtaining information about their operation Verification that the identified controls are working effectively and achieving their objectives.

In the event that the information and registration systems are computerized, the auditor must establish whether the internal controls are working properly, in order to give him confidence regarding the integrity of the data processed through computerized means.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Evaluation of compliance with legal and regulatory provisions.

In the execution of the government audit, compliance with applicable laws and regulations should be evaluated when necessary for the audit objectives.

In the development of government auditing, the evaluation of compliance with laws and regulations is also important because government agencies, programs, services, activities and functions are generally created by law and are subject to more specific laws and regulations than those that govern the private sector. Said regulations establish, among other aspects, what must be done, who must do it, the goals and objectives to be achieved, the population that will benefit, how much and on what it should be spent.

The sources of information on legal provisions are diverse. An adequate primary source is the audited institution, since it knows the applicable legislation. When the aforementioned institution receives funding from another government level and its source is known, the auditors may turn to the organization that provides the funds to obtain and / or verify information related to the pertinent standards.

When it is necessary to assess compliance with applicable laws and regulations, the auditor should plan the audit in such a way as to have reasonable assurance that potential abuses or unlawful acts will be discovered that could significantly influence the results of the audit.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The auditor is not necessarily qualified to investigate illicit acts of certain types that, due to their specialization or complexity, fall within the competence of the authorities responsible for investigating these types of facts or applying the corresponding laws. However, you are obliged to know the characteristics and types of potential risks of the audited area and of the illegal acts that may occur in it, so that you are able to identify the signs that these acts may have occurred.

Performing an audit in accordance with the Internal Governmental Auditing Standards will not guarantee that all abuses or wrongdoing will be discovered. The subsequent discovery of such acts that occurred during the period that was the subject of the audit will not necessarily mean that the performance of the auditor was inadequate, provided that the audit was carried out in accordance with the established Internal Governmental Auditing Standards..

Supervision of the audit work.

Staff must be adequately supervised.

Supervision involves directing the efforts of the auditors involved in the audit to determine whether the audit objectives are being achieved. Elements of supervision include: instructing staff members, staying informed of significant problems encountered, reviewing work performed, and providing on-the-job training.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Supervisors must be assured that staff clearly understand the work to be done, why it is to be done, and what is expected to be accomplished. With experienced staff, supervisors can outline the scope of work and leave the details to the assistants. With less qualified staff, supervisors can indicate not only techniques for analyzing information but also how to collect it.

In the government audit, supervision will be exercised by the auditor in charge, the supervisor and the immediate higher levels directly linked to the examination process.

Supervision will be applied when planning and executing the field work, as well as preparing the corresponding audit report.

The amount of audit work to be supervised will depend on the objectives and scope of the audit, complexity of the work, and external conditions, such as the distance from the institutions to be examined.

Sufficient, competent and relevant evidence.

The auditor must obtain sufficient, competent and relevant evidence through the application of tests of control and substantive procedures that allow him to reasonably substantiate the judgments and conclusions that he formulates regarding the body, program, activity or function that is the object of the audit.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The evidence should be tested to ensure that it meets the basic requirements of sufficiency, competence and relevance. The working papers should show the details of the evidence and reveal how it was obtained.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Characteristics of the evidence.

Sufficiency

Sufficient objective and convincing evidence is sufficient to support the auditor's findings, conclusions, and recommendations. The evidence will be sufficient when, based on the results of the application of one or more tests, the auditor can acquire reasonable certainty that the disclosed facts are satisfactorily verified. When appropriate, statistical methods may be used for that purpose.

Competition

To be competent, the evidence must be valid and reliable. In order to assess the competence of the evidence, the auditor should carefully consider whether there are reasons to doubt its validity or integrity. If so, you will need to obtain additional evidence or disclose that situation in your report.

The following assumptions are useful, non-exclusive criteria for judging whether the evidence is competent.

Evidence obtained from independent sources is more reliable than that obtained from the audited body itself Evidence obtained when an appropriate internal control system has been established is more reliable than that obtained when the internal control system is deficient, is not satisfactory or has not been established.

RULES RELATING TO THE EXECUTION OF THE INTERNAL GOVERNMENT AUDIT

Evidence that is physically obtained through examination, observation, and calculation or inspection is more reliable than that obtained indirectly. Original documents are more reliable than copies. Testimonial evidence (Affidavit) that is obtained in circumstances that allowing informants to express themselves freely deserves more credit than that obtained in compromising circumstances (for example, when informants may feel intimidated).

Relevance

It refers to the relationship that exists between the evidence and its use. The information you use to prove or disprove a fact is relevant if it has a logical and obvious relationship to that fact. Failure to do so will be irrelevant and therefore should not be included as evidence.

When they deem it appropriate, the auditor must obtain from the officials of the audited institution, written statements regarding the relevance and competence of the evidence obtained.

Classification of the evidence.

Physical evidence

It is obtained through inspection or direct observation of activities, goods or events. Evidence of this nature may be in the form of a memorandum (summarizing the results of the inspection or observation), photographs, graphs, maps, or material samples.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Documentary evidence

It consists of processed information, such as that contained in letters, contracts, accounting records, invoices and management documents related to their performance.

Testimonial evidence (Affidavit)

It is obtained from other people in the form of statements made in the course of investigations or interviews. Statements that are important to the audit should be corroborated, whenever possible, by additional evidence. It will also be necessary to evaluate testimonial evidence to make sure that the informants were not influenced by prejudice or had only partial knowledge of the audited area.

Analytical Evidence

It includes calculations, comparisons, reasoning and separation of information into its components.

Reliability of evidence from computerized systems

When the information processed by electronic means constitutes an important or integral part of the audit and its reliability is essential to fulfill the objectives of the examination, the auditor must satisfy itself of the relevance and reliability of that information.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

To determine the reliability of the information, the auditor:

It will be able to carry out a review of the general controls of the computerized systems and those related specifically to their applications, including all the tests that are allowed; o If you do not review general and application-related controls or find that those controls are unreliable, you may perform additional tests or use other procedures.

When the auditor uses data processed by electronic means or includes them in his report as background or for informational purposes, because they are not significant to the results of the audit, it will generally be sufficient for the report to cite the source of such data to comply the standards related to the accuracy and completeness of your report.

Work papers

The government auditor should organize a complete and detailed record of the work carried out and the conclusions reached, in the form of working papers.

The working papers are the link between the planning and execution work and the audit report. Therefore, they must contain the necessary evidence to support the findings, opinions and conclusions that are presented in the report. They may include tapes, photos, films, records or other evidence.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

There is nothing to replace a proper understanding of the audit objectives, the reasons why a certain task will be undertaken, and how that task will contribute to the achievement of the objectives. This understanding is achieved when the auditor has properly planned and organized working papers and receives suitable instructions from their supervisors.

The practice of clearly indicating the objectives to be pursued in the working papers will be very useful to ensure that the information obtained will be directly related to the objectives of the audit and the corresponding report.

Purpose

Contribute to the planning and performance of the audit Provide the main support for the auditor's report Allow adequate execution, review and supervision of the audit work Provide evidence of the work performed and support the conclusions, comments and recommendations included in the report.Allow audit quality reviews.

Requirements

Be complete and accurate, in order to properly support the findings, opinions and conclusions and demonstrate the nature and scope of the work performed. Conciseness is important, but clarity and integrity should not be sacrificed just to save time or paper.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

They must be sufficiently clear, understandable and detailed so that an experienced auditor, who has not had a direct relationship with the audit, is able to substantiate the conclusions and recommendations, through their review. They should not require oral explanations. Be legible and orderly, otherwise they could lose their value as evidence. They should contain relevant information, that is, be limited to matters that are pertinent and important to meet the objectives of the entrusted work.

Content

The form and content of working papers are affected by factors such as:

The nature of the audit The type of report to be issued The nature and complexity of the Institution's activity.

As a general rule, working papers should contain:

The Planning Memorandum and the Audit Programs, which must be duly referenced to the work papers. Objectives, scope and methodology, including the criteria used for the selection of the samples.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Indication of how the information was obtained, with reference to the base documents and the people who provided it (sources). Documentation of the work that supports the conclusions and significant judgments. Appropriate indexes, references, schedules and summaries. Conclusions on each one of the components in which the exam is divided Date and signature of the person who prepared it Evidence of the reviews carried out when supervising the work carried out.

Ownership and custody of work papers.

The working papers are property of the Comptroller General of the Republic

The auditor will protect the integrity of the working papers, having to ensure at all times and under any circumstances, the secrecy of the information contained therein.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Communication of observations

During the audit process, the auditor in charge must promptly communicate the observations to the officials and servants of the institution under examination who are included in the observed facts, so that within an established peremptory period, they present their documentary evidence, for their timely evaluation. and consideration in the corresponding report.

The observations refer to the findings determined as a result of the application of the audit procedures in harmony with the established objectives, and constitute the deficiencies or irregularities technically evidenced in the audited institution.

The observations inform the conclusions and recommendations of the report, and must meet the following requirements:

Be fact-based and supported by evidence Be objective Be based on sufficient work to support conclusions and recommendations.

The government auditor must develop his findings and be recorded in the working papers, duly referenced and documented.

To fully and clearly reveal the findings, they will necessarily have the attributes of: Condition, Criterion, Cause and Effect.

RULES RELATING TO THE EXECUTION OF THE INTERNAL GOVERNMENT AUDIT

The communication of observations is the process by which the auditor, once the findings are evidenced, immediately complies with making them known to the immediate superior for the purpose of preparing a preliminary report, if the case warrants it. The auditor in charge must communicate the observations in order to grant the exercise of the right of defense of the persons included in them, in observance of the legal provisions in force.

The communication is made in writing in a reserved and direct way, and its reception must be accredited.

The aforementioned action allows the auditor to have the elements of judgment that sufficiently and competently support the comments, conclusions and recommendations of the audit report.

The reference to civil servants and public servants referred to in the norm also extends to people who are no longer working in the Institution under examination.

The auditor in charge and the supervisor are responsible for preparing the communication of observations.

The observation to be communicated will refer to events that are material in accordance with the provisions of the Planning Memorandum.

The non-presentation of the discharges by the public servant or official within the established period must be disclosed in the report, as well as the facts that are the subject of the observation.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The auditor in charge and the supervisor are responsible for the timely evaluation of the discharges received, which will be filed in the working papers and properly referenced.

A paragraph on compliance with the communication of observations will be included in the introduction of the report.

Representation letter

The auditor must obtain a letter of representation from the owner and / or the competent managerial level of the audited institution.

The letter of representation is the document by which the owner and / or competent managerial level of the audited institution acknowledges having made the required information available to the auditor, as well as any significant event that occurred during the period under audit and until the termination date. of field work.

If the owner and / or management levels refuse to provide the auditor with the aforementioned requirement, said situation will be disclosed in the audit report.

This group of standards establishes the technical criteria for the content, preparation and presentation of the Government audit report related to the performance audit and special examinations. The Generally Accepted Auditing Standards (NAGA) and the International Auditing Standards (NIA), which govern the accounting profession in the country, are applicable to all aspects of content, preparation and presentation of the government audit report.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The standards grouped in this section may also be applicable to some financial audits.

The rules mentioned below regulate the formulation of the report, establishing the written form, timing, presentation and content of the report.

Written report

Auditors must prepare written audit reports to communicate the results of each examination.

It is not the purpose of this standard to limit or avoid the discussion of the findings, judgments, conclusions and recommendations with persons responsible for the institution or the audited area.

On the contrary, discussions of this nature are highly recommended. However, a written report must be submitted regardless of whether such discussions have taken place.

Written reports are necessary to:

Communicate audit results to officials at appropriate levels of government Reduce the risk that results will be misinterpreted Make audit results available to relevant authorities.

RULES RELATING TO THE EXECUTION OF THE INTERNAL GOVERNMENT AUDIT

Facilitate follow-up on findings and recommendations to verify that appropriate corrective measures have been taken.

Report timing

Audit reports should be issued as soon as possible so that their information can be used in a timely manner by the head of the institution under review and / or officials at the appropriate levels of government.

In order to be as useful as possible, the report must be timely, for which it is important to adhere to the scheduled dates for the different phases of the audit. A carefully prepared report may be of little value to decision makers if it is received too late. The auditor should anticipate the timely issuance of the report and keep that purpose in mind when performing the audit.

During the audit, the auditors should consider the convenience of presenting reports to the corresponding officials regarding matters that are significant. Reports of this nature, which may be oral or written, will not replace the final report, but will serve for officials to find out about matters that require their immediate attention and to undertake the appropriate corrective actions before the end of the report. final report.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Presentation of the report

The report must be prepared in simple and easily understandable language, dealing with matters in a concrete and concise manner, which must coincide exactly and objectively with the observed facts.

The auditor should not assume that the user of the report has detailed knowledge of the topics included in the report.

For a report to be concise, it should not be longer than necessary to convey its message, therefore it requires:

An appropriate use of words, according to their meaning, excluding unnecessary ones. The inclusion of specific details when necessary in the auditor's judgment.

Important issues should not be omitted from the report, nor should superfluous words or concepts be used that lead to misinterpretation. It is important for the auditor to bear in mind that too much detail can confuse the user and even obscure the main purpose of the report.

Accuracy requires that the evidence presented is true and that the findings are correctly stated. It is based on the need to ensure that the information presented is reliable in order to avoid errors that could undermine credibility and generate questioning and substantial validity of the report.

The facts must be presented in an objective and weighted manner, that is, with enough information to allow the user an adequate interpretation of the aforementioned matters.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Report content

At the end of the work, the auditor must prepare a report in which he will appropriately present the results of the examination, stating that it was carried out in accordance with the Internal Government Auditing Standards.

The purpose of this standard is to regulate the content of financial, management and other types of audit reports derived from them, such as special audits, ensuring uniformity in their name and structure, as well as a clear and precise statement of the results of the exam.

The report must present the following structure:

Introduction

You will understand general information regarding the audit and the institution examined.

Exam information

Exam reason

It will refer to the causes that originate the control action, as well as the reference to the accreditation document. The reasons why the audit was carried out should be stated.

Nature and Objectives

In this line, the nature or type of examination to be carried out will be specified, whether it is a management, financial or special audit.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The objectives refer to what you hope to achieve as a result of the exam. By exposing them, the limits of the audit will be made known in order to avoid erroneous interpretations in cases where the objectives have been particularly limited or specific on certain aspects of management.

Scope

It will be recorded that the work was carried out in accordance with the Generally Accepted Auditing Standards and the Internal Government Auditing Standards.

The coverage and depth of the work that has been carried out to meet the audit objectives must be clearly indicated, specifying the audited period, the geographical area where the audit was carried out and the areas subject to examination.

If this is the case, the auditor will disclose the scope limitations that arise in the work process. If data that has not been verified is used, that fact must be stated. Modifications made to the audit approach, as a consequence of limitations of the information or the scope of the audit, should also be disclosed.

Communication of observations

Compliance with the communication of observations made to the officials of the institution included in them will be announced.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Information regarding the institution examined

Background and Legal Basis

A brief reference should be made about the creation of the institution, its organizational structure, the main activities it develops and the area examined.

The legal basis will specify the reference to the legal provisions that regulate it.

List of people included in the observations

It refers to the personnel of the audited institution included in the observations, which will be consigned in an annex to the report, indicating the names and surnames, position, management period, employment status and home address.

Financial, economic and budgetary position

Taking into account the type of examination carried out, at the auditor's discretion, the balance sheet, income statement, budget execution report or others will be included, as appropriate.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Conclusions

In this line, the auditor must express his conclusions, which are professional judgments based on the observations resulting from the examination carried out. The conclusions will refer to the evaluation of the management results of the examined institution, regarding the achievement of the objectives, goals and programs, as well as the use of public resources, in terms of economy, efficiency and effectiveness.

Likewise, the conclusions must indicate the determination of the violation incurred by public officials or servants.

At the end of each conclusion, reference will be made to the number corresponding to the observation in which the fact is presented with all the details.

Observations

In this part of the report, you should disclose:

All that information that, in the auditor's opinion, allows knowing facts and circumstances that significantly affect the management of the audited institution, such as the recognition of the difficulties or circumstances in which those responsible for said management developed, in the cases in which this happens, without prejudice to the observance of the objectivity and impartiality requirements that should guide the auditor in the preparation of his report.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The observations derived from the examination.

The main aspects to be taken into account when writing the observations will be:

1.- The observations will refer to significant matters and will include sufficient, competent and relevant information related to the results of the evaluation carried out on the management of the examined institution, as well as the use of public resources, in terms of economy, efficiency and effectiveness.

2.- It must also include the necessary information regarding the antecedents in order to facilitate the understanding of the observations.

3.- The term observation refers to any deficient and relevant situation determined from the application of the audit procedures and will be structured according to the attributes (condition, criteria, cause and effect) that are considered to be of interest to the institution. audited.

Each observation must be written in narrative form, taking into account the following aspects for presentation:

Header

It refers to the title used by the observed fact.

Condition

This term refers to the description of the irregular situation or deficiency found.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Criterion

They are the transgressed rules of a legal, operational or control nature that regulate the actions of the examined institution. The development of the criteria in the presentation of the observation must specifically cite the relevant regulations and the applicable text thereof.

Cause

It is the fundamental reason why the condition occurred, or the reason why the criterion or rule was not met. Its identification requires the skill and professional judgment of the auditor and is necessary for the development of a constructive recommendation that prevents the recurrence of the condition.

Effect

It is the real or potential consequence, quantitative or qualitative, that causes the finding, essential to establish its importance and recommend that the administration take the actions required to correct the condition. Whenever possible, the auditor should disclose the quantification of the effect in his report.

At the end of the development of each observation, the discharges presented by the persons included in the same will be indicated, as well as the opinion of the auditor after evaluating the observed facts and the discharges received If during the examination the auditor appreciates the notable achievements in the institution audited and that are related to the scope and objectives of the audit, in their opinion they may decide to include them in the

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

In the case of the existence of possible crimes, the auditor must define and determine the type of responsibility that corresponds to the allegedly implicated, counting on adequate coordination with the legal advice.

recommendations

The recommendations constitute the measures suggested to the Administration of the audited institution, aimed at promoting the overcoming of the observations or findings emerging from the management evaluation. They will be addressed to public officials who have the competence to order their application.

The report must contain constructive recommendations that, based on the corresponding findings and conclusions, encourage the adoption of corrective measures that make it possible to significantly improve the management and / or performance of public officials and servants, with emphasis on the achievement of objectives, goals and programs of the audited institution within parameters of economy, efficiency and effectiveness.

The recommendations must be aimed at overcoming the causes of the problems observed, will refer to specific actions and will be directed to those who are responsible for undertaking those actions.

In addition, it is necessary that the recommended measures are feasible to implement and that their cost corresponds to the expected benefits.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

The recommendations should contain the description of courses of action to optimize the fulfillment of institutional, sectoral and national goals and objectives.

When formulating recommendations, emphasis will be placed on specifying the necessary measures for corrective action, applying criteria of opportunity, according to the nature of the observations.

Recommendations will be included so that applicable laws and regulations are complied with and internal controls are improved when cases of non-compliance and control deficiencies observed are significant.

Significant recommendations determined in previous audits that have not been corrected and are related to the objectives of the examination should also be included in this item.

Annexes

In order to achieve the maximum conciseness and clarity in the report, the indispensable annexes that complement or expand the important information contained therein will be used.

They may refer, among other aspects, to the grounds of the discharges presented by the persons included in the observed facts, to the technical and legal reports, depending on the nature of the findings, and to the consolidated financial statements, if they have not been audited.

RULES RELATING TO THE EXECUTION OF THE GOVERNMENT INTERNAL AUDIT.

Firm

The report must be signed by the auditor in charge, the supervisor and the managerial level corresponding to the Comptroller General of the Republic.

Special report

When in the execution of the audit work, serious faults and / or reasonable indications of crime commission are evidenced, to the detriment of the interests of the State, the auditor, without prejudice to the continuity of the respective examination, must issue with the speed of the case, a special report with the respective technical and legal support, so that the pertinent actions are carried out immediately by the corresponding instances.

The application of this standard will allow the auditor, based on his professional judgment and in observance of the applicable legal regulations, to exercise his work in cases of serious misconduct during the performance of his work in the audited institution. In the case of serious misconduct, it will be communicated to the head of the institution for its respective demarcation and pertinent corrections.

The issuance of the special report does not exempt the auditor from his obligation to recommend immediate measures for the protection of the State's assets.

In preparing the special report, the structure of the government audit report will basically be taken into account.

BIBLIOGRAPHY

1) AUDIT RULES

Published by the Auditing Standards Committee

International Organization of Supreme Audit Institutions

(INTOSAI).

June, 1992.

2) GOVERNMENT AUDIT RULES

Comptroller General of Peru

Lima Peru.

3) GOVERNMENT AUDIT RULES

Comptroller General of the United States.