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Executive Summary:

ISSAI 4200 – Compliance Audit Guidelines - Compliance Audit Related to the Audit of Financial Statements

Purpose:

These guidelines concern situations where compliance audit is performed together with an audit of financial statements. They build upon INTOSAI's Fundamental Auditing Principles (ISSAI 100–400) and have been designed to assist public sector auditors and SAIs in applying these principles. These guidelines supplement INTOSAI's Financial Audit Guidelines (ISSAI 1000-2999).

ISSAI Category:

Level 4: General Auditing Guidelines – General Auditing Guidelines on Compliance Audit

Target Group:

Heads and Audit Directors of SAIs, External Governmental Auditors, Internal Auditors

Principle:

When performed in connection with an audit of financial statements, the subject matter of a compliance audit is generally decisions and financial management in relation to the use of appropriated funds and the execution of the budget. Such a compliance audit comprises

  • The assessment of whether the activities, financial transactions and information reflected in the financial statements are in accordance with the the authorities which govern them and
  • Whether the entity’s income and expenditure have been applied to the purposes intended by the legislature and to the entity’s mandated mandated program objectives.
Scope - Content:

The document follows the general process in carrying out compliance audits and is described in the subsequent sections:

  • Initial considerations (Objectives to be achieved, ethical considerations, quality control, ….)
  • Planning and designing a compliance audit (identification of parties involved, legal basis, audit criteria and strategy, materiality, risk assessment, ….)
  • Performing compliance audits and gathering evidence (documentation, communication, ….)
  • Evaluating evidence and forming conclusions
  • Reporting (audit reports, follow-up processes, ….)
  • Additional guidance for public sector auditors operating in a court of accounts environment

The guideline is completed by examples illustrating the regularity and the propriety concept of compliance audits.

Author - Committee:

INTOSAI Professional Standards Committee

Status:

Approved at XXth Congress of INTOSAI, Johannesburg 2010

Download:

http://www.issai.org/en_us/site-issai/issai-framework/4-auditing-guidelines.htm

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