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7/30/2019 Application of international auditing standards (ISA and ISSAI) to increase efficiency and effectiveness of external public sector auditing
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DrDuko njegota, Auditor General of the Supreme Office forRepublika Srpska Public Sector Auditing
The authors views expressed in this presentation do not necessarily reflect the views of
the United States Agency for International Development or the United States
Government.
Application of international auditing
standards (ISA and ISSAI) to increase
efficiency and effectiveness ofexternal public sector auditing
7/30/2019 Application of international auditing standards (ISA and ISSAI) to increase efficiency and effectiveness of external public sector auditing
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Partnership for Advancing Reforms in the Economy (PARE)
Law on Public Sector Auditing of RepublikaSrpska (RS), 2005
Auditor General and his deputy are responsible to
ensure that the functions of the SAI are performedindependently, impartially, and in accordance with
INTOSAI auditing standards, IFAC-auditing
standards, and standards of Republika Srpska;
According to the Law on Accounting and Auditing ofRepublika Srpska, the international auditing
standards (ISA) are applied in Republika Srpska.
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What international accounting and auditingstandards are applied in Republika Srpska?
INTOSAI auditing standards
International auditing standards (ISA)
International public sector accounting standards (IPSAS)
International accounting standards (IAS)
International financial reporting standards (IFRS)
International financial reporting standards for SMEs
(IFRS for SMEs)
Partnership for Advancing Reforms in the Economy (PARE)
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ISSAI framework of auditing standards
Includes 4 levels of standards, principles essential for public
sector auditing prescribed by the Law:
Level 1: Basic principles
Level 2: Preconditions for functioning of SAIs
Level 3: Basic principles of auditing, and
Level 4: Auditing guidelines
In the field of financial auditing, the level 4 encompassesISA standards established by IFAC, and guidelines for
application of such standards by SAIs.
Partnership for Advancing Reforms in the Economy (PARE)
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Basic info on the Supreme Office for RepublikaSrpska Public Sector Auditing (SAI RS)
Established in 1999
Its mandate is to perform financial and performanceaudits
Performance audits are done within financial auditing,
especially in relation to the requirement of ISA 250
Currently employs 50 auditors out of which 10 work inthe performance audit division
Performance audits have been done since 2006
Partnership for Advancing Reforms in the Economy (PARE)
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Subject of auditing by SAI RS
Mandatory financial auditing of Republika Srpska
budget beneficiaries
Financial auditing of the part of local self-governmentunits is performed every year
Every one of the total of 63 local self-government
units has on average been subject to financial
auditing 2 or 3 times SAI RS has the mandate to perform auditing of public
enterprises and public institutions. This is performed
occasionally, depending on available
Partnership for Advancing Reforms in the Economy (PARE)
7/30/2019 Application of international auditing standards (ISA and ISSAI) to increase efficiency and effectiveness of external public sector auditing
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What has the practice of applying international
accounting and auditing standards shown so far?
High level of adjustment between domestic and
international legislations;
Confirmed in official evaluations by international
institutions such as European Commission, World
Bank, IMF, IFAC, SNAO, SIGMA etc.;
Established relatively efficient legal and professionalframeworks that can ensure capability of domestic
stakeholders to successfully monitor change and
respond to challenges.
Partnership for Advancing Reforms in the Economy (PARE)
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Impact of economic and financial crisis on adoptionand further development of good practice
Relatively high
Causes restrictions in financial and human resources
Slows down the development of individual processes
essential for the quality of external auditing by SAI RS,
such as further development of treasury operations,
introduction of full accounting basis for budget accounting,effective connection between government financial
statistics (GFS) and national accounting statistics (per ESA
95 methodology) etc.
Partnership for Advancing Reforms in the Economy (PARE)
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Key recommendations
Consistent application of internationally recognized
accounting and auditing methodologies is essential for
establishing and maintaining of transparent system of
public funds management in Republika Srpska and inBosnia and Herzegovina;
Complete and updated adjustment of methodology
applicable in local conditions to internationally accepted
methodologies is by all means a process that has to go oncontinuously;
Full respect for specificities of local economic and other
circumstances is necessary.
Partnership for Advancing Reforms in the Economy (PARE)
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Key messages
Efficiency and effectiveness of public sector external
auditing that SAIs are in charge of largely depends
on the level of application of ISSAI framework Consistent application of ISSAI framework enables
clear positioning of SAIs and the public recognition of
their actual role and importance
All this is especially significant for clear and properdefinition of the role of each SAI in prevention and in
other types of fight against crime and corruption
Partnership for Advancing Reforms in the Economy (PARE)
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Some of the key challenges for SAI of RS Prompt application of ISSAI framework;
Keeping independence of SAI RS as one of the
fundamental principles for its effective and efficient work;
Ensuring of effective and efficient system of externalcontrol of the quality of work of SAI RS;
Increase functionality of the system of internal control and
quality, both at the level of SAI RS and at the level of each
individual auditing engagement; Further improvement of international cooperation;
Professional development and stronger application of IT
in auditing.
Partnershi for Advancin Reforms in the Econom PARE
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THANK YOU FOR YOUR
ATTENTION
Partnership for Advancing Reforms in the Economy (PARE)