Consolidate and improve INTOSAI practice notes to ISSAIs – GUID 2900

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Bahrain National Audit Office

The following table summarizes the proposed revisions to the existing financial audit Practice Note content to arrive at the GUID 2900 Exposure Draft. Please provide your comments on these proposed revisions in the last column in the table.Please also use the bottom of this table to provide general comments on GUID 2900 and comments on proposed new ISSAI 2000.           # IFPP Document Paragraph Explanation Respondent Comment 1 GUID 2900 Section 1 - Preamble This new section was developed to meet the specific information requirements of the GUID drafting convention and also to present in one place text that was previously repeated in each individual Practice Note. An extra paragraph can be added to avoid repeating the background sections in each standard guid. This addition will replace around 35 paragraphs all over the guid. The recommended paragraph is: This guid provides supplementary guidance on some ISSAI 2200, 2210, etc. This guid is read together with the ISSAIs. 2 GUID 2900 2.4 Revisions proposed to meet the needs of jurisdictions that apply the cash basis of accounting. The Statement of Revenues and Expenditures (modified accrual basis) may be added as well to the list of statements, as it is applicable to some SAIs. 3 GUID 2900 3.6 Proposed revision to provide greater clarity on the scope of the ISSAI financial audit. The broader scope and objective of the public auditor will cover the listed matters in this paragraph, but it is the responsibility of all auditors to report these matters if discovered. It should not be mentioned in detail in the engagement letter. 5 GUID 2900 4.3 Proposed revisions to more clearly explain the quality control requirements of an ISA and of an ISSAI financial audit. This paragraph doesn’t give supplementary information in addition to what is mentioned in the ISSAI 2000. 6 GUID 2900 4.4 Proposed revisions to more clearly explain the ethical requirements of an ISA and of an ISSAI financial audit. This paragraph doesn’t give supplementary information in addition to what is mentioned in the ISSAI 2000. 7 GUID 2900 4.5 New paragraph added to improve the guidance on the audit of listed entities. In our view, this paragraph does not provide supplementary information. 13 GUID 2900 8.8 The reference to the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants was determined to not be necessary in this paragraph. As Objectivity is as critical as Political Neutrality to all auditors, we suggest adding objectivity to this point as well. 18 GUID 2900 11.13 Revision proposed by a Court of Audit that provided input during the development process.   36 GUID 2900 29.3 Revision proposed by a Court of Audit that provided input during the development process.   38 GUID 2900 32.3 Revisions proposed to clarify the responsibility of the auditor with respect to evaluating compliance with authorities in the context of a financial statement audit. Mainly non-compliance that have financial implications will impact the audit report. 43 GUID 2900 GENERAL - Large guid with more than 100 pages, if possible to reconsider the presentation of the guid and deletion of the background and the content paragraphs of each standards (around 75 paragraphs with no supplementary information). 44 GUID 2900 2.2 - Change the 3rd content to Professional Skepticism 45 GUID 2900 2.6 - The paragraph doesn’t provide supplementary guid. 46 GUID 2900 3.12 + App. A - It may be helpful to highlight the part that has different or additional information in the Engagement Letter. 47 GUID 2900 6.4 - Reconsider to move the definition of Abuse to section 3, as it is the first section that mentioned the Instance of Abuse. 48 GUID 2900 20.3 - Additional analytical procedures examples:Debt performance policies by comparing the total debt to GDP.Interest expense to revenue generated.Revenue collection and budget.Monthly revenue and expenditure analysis.Trend for related accounts. 49 GUID 2900 22.2 - ( D ) of the content is not in the guid. 50 GUID 2900 32.5 - It doesn’t provide supplementary information; it only refers to the concerned paragraphs in the ISSAIs. 51 GUID 2900 34.3 - The footnote 12: If the SAI assign an audit firm to perform an audit on its behalf the audit report for the audit engagement is issued by the audit firm on behalf of the SAI. 52 GUID 2900 36.1 - ISSAI number mistakenly mentioned as 1800 instead of 2800 in the 3rd line. 53 GUID 2900 Appendix A - No need to list the definitions of "non-effective performance of operations, instances of non- compliance with authorities, waste, and instant of abuse" 54 GUID 2900 Appendix D - Reconsider moving the definition of the Key Audit Matter to section 31 if necessary.

Cour des comptes

Details related to the specific nature of the activities audited : A significant number of comments refer to situations that commercial entities audited under the ISAs norm know little about: political pressures, tax collection, sudden budget cuts, incompetent management, privatizations, etc. The conduct to be followed by the public auditor in this case could be more developed in this GUID, even though the great variety of situations and the difficulty to make appropriate recommendations are real.   Regarding the articulation between the audit of public accounts and the other missions entrusted to SAIs, in particular jurisdictional activities (§ 5-17 of ISSAI 2230, 10-9 of ISSAI 2300 and 14-11 of ISSAI 2402): Particular constraints may arise in particular from the existence of jurisdictional competence for SAIs with the status of a court of audit. Accordingly, the additions made by the draft version of Guide 2900 include recommendations on the treatment of facts and documents gathered during the audit when the SAI also has jurisdictional powers. The general idea is that, subject to compliance with procedural requirements, such findings should be circulated within the SAI between the audit department and the jurisdictional department. However, these comments may not be sufficiently accurate, given the diversity of situations in each SAI. In France, the jurisdictional function is split between three actors: the preliminary investigations carried out by the ordinary formations of the financial courts, the formalisation of charges which is the exclusive responsibility of the Public Prosecutor's Office, which is mentioned only indirectly and allusively in the exposure draft, and, finally, the instruction and judgment which is the responsibility of specialised formations within each jurisdiction. The notion of "fair trial" is not mentioned. It is the cause of specific procedures aimed, in particular, at protecting the rights of the defence. Moreover, these comments do not seem to take into account the difference in the timing of the two phases; the audited accounts are not definitively closed when the checks are carried out, whereas juridisctional review is necessarily carried out on final accounts relating to a previous financial year and for which the review has been the subject of a specific notification. The exposure draft (§ 10-9 of ISSAI 2300) could therefore be completed by the following sentence :  “Public sector auditors in such environments may also work closely with prosecutors and police when dealing with financial fraud, subject to the reservations and conditions surrounding the transmission to the jurisdictional department of the information collected on the occasion of a financial audit in order to preserve the due process. Therefore, public sector auditors in such environments may also obtain information from prosecutors and police when appropriate.”   Regarding the continuity of operation: the commentary of the Standard 2570 focuses on sub-State bodies and rightly recommends that consideration should be given to the effects of external political decisions on the fulfilment of their missions. Though, the question of the accounts of the State itself does not seem to be addressed.   Standard 2240: the reference on page 22, § 6.10 to ISAI 224 § 17 (c) is erroneous, it is § 18 (c); likewise in § 6.14 the reference to § 32 (c) should be 33 (c) and in § 6.15 the reference to § 38 (b) and 38 (c) should be 39 (b) and 39 (c); Standard 2250: § 1 seems to ignore the fact that the corresponding ISA has been revised and that its application date is 15 December 2017; in § 7.7 the reference to § 28 of the standard and erroneous, it is § 29.

Office of the Comptroller General of Ecuador

Paragraph: Document
The Guidance to the Financial Auditing Standards contains a clear description of the application of financial audit standards in the government sector. The Guideline is related to the International Standards on Auditing. However, we suggest to include in the explanation of each ISSAI a paragraph describing the scope of the Standard. Also, we suggest to consider including a section of key terms and definitions in order to enhace the understanding and application of this Guideline by the reader.