Propriety– that general principles of sound public sector financial management and ethical conduct have been adhered to, legality and competence are ensured.
Elements of compliance audit
Compliance audit in Public Sector audits have certain basic elements
(i) Three parties in the audit i.e. the auditor, the responsible party, intended user,
(ii) Subject matter and
(iii) Authorities and criteria to assess the subject matter.
The three parties
The three parties involved in compliance audit are briefly described below:
(i) The auditor: represents the Indian Audit & Accounts Department and the persons delegated with the task of conducting audits. Auditors in compliance audits typically work as a team with different and complementing skills. The auditor is responsible for planning and implementation of audit and issuing a compliance audit report.
(ii) The responsible party:represents the executive branch of government and/or its underlying hierarchy of public officials and entities responsible for the management of public funds and the exercise of authority under the control of the legislature. The responsible party in compliance auditing is responsible for the subject matter of the audit.
(iii) The intended users:represent the individuals, organizations or classes thereof for whom the auditor prepares the audit report. In compliance auditing the users generally comprise the executive which includes auditable entity and those charged with Governance, the legislature and the citizens who are the ultimate users of compliance audit reports.
Strategic Audit planning is the process of determining the long term goals for the Department and the best approach for attaining them. It consists of strategic goals (mission statement), strategic objectives (more specific and detailed statements) and strategic measures to attain them.
The field audit offices are also required to prepare their audit plans with reference to the Department's strategic audit plan. While formulating their audit plans, the fields offices should ensure that the plans are consistent with
Department's strategic audit plan and help in accomplishment of long terms objectives as enumerated in the Strategic audit plan of the department as a whole besides addressing the audit risks in their respective areas of jurisdiction.
Objectives of strategic audit planning
Provide a firm basis for the Department's Management to give strategic direction for future audit coverage;
Identify and select audits with the potential to improve public sector accountability and administration;
Understand entity risks and take them into account in audit selection;
Provide a basis for Department's accountability; and Produce a work programme that can be achieved with expected/available resources
The audit units may be defined based on the quantitative measures of devolution of administrative and financial powers, the qualitative measures of functional autonomy and operational significance attributable to the unit for achievement of objectives of the Department.
An Audit Unit is therefore defined as a unit, which has one or more of the following attributes:
substantial devolution of administrative and financial powers;
functional autonomy; and
operational significance with reference to achievement of objectives of the apex auditable entity.
