Increased focus on quality is needed to
enable effective audit practices
The last GSR concluded that SAIs have a way to go to address audits in a holistic manner. Concurrently, it concluded that many SAIs struggles with resources and capacity constraints which affect their ability to audit in compliance with the INTOSAI Audit Standards for Supreme Audit Institutions (ISSAIs). SAIs need to implement institutional mechanisms that can support in delivering high quality audits and mitigate their reported capacity constraints This chapter looks at the audit results considering two key performance enablers as follows: 1) SAIs ability to build the necessary institutional structure around the audit process, and 2) SAI capacity to build staff audit competencies as a means of improving the quality of their work.
ISSAI adoption not accompanied by systematic standard implementation
The adoption of ISSAIs is a common starting point for SAIs who want to develop and improve their audit practices.
Compared to the GSR2020, more SAIs report that they are familiar with the transition from the ISSAIs to the INTOSAI Framework of Professional Pronouncements (IFPP). 83% of SAIs globally now report that they are aware of the IFPP, against 74% who reported familiarity in GSR2020.
SAIs now almost universally adopt the ISSAIs (97%), but the approach to adoption differs. 62% of SAIs have adopted the relevant ISSAIs as their authoritative auditing standards. In addition, another 35% have either adopted national standards based on ISSAIs or developed their own standards based on ISSAIs. This seems to be an increase against the GSR2020, where 86% of SAIs had they had adopted ISSAIs.
Figure 32 – Has your SAI adopted the ISSAIs as its authoritative auditing standards?
Figure 33 – Existence of a provision in the audit act for adoption of audit standards
Considering regional differences, adopting ISSAIs as the authoritative auditing standards is most common in AFROSAI-E (96%), CAROSAI (74%) and CREFIAF (73%), while North America adopted national standards based on the ISSAIs, together with almost half of SAIs in PASAI (44%). The latter could probably be explained by the fact that a proportion of PASAI members are American territories that use the Yellow Book as their audit standard (GAGAS)*Generally Accepted Government Auditing Standards. Within OLACEFS the approaches vary, but it’s worth noting that 33% of SAIs developed their own audit standards based on the ISSAIs.
While most SAIs are using the ISSAIs as a foundation for their audit practices, there is a need to better understand how the adoption happens within the SAI. A starting point is to consider whether there is a legal foundation for adopting audits standards, which could affect the approach SAIs take. According to the Global Survey results, 61% of SAIs have a provision in the audit legislation pertaining to the adoption of audit standards. Taking a regional perspective, one can observe that a legal foundation for auditing standard adoption, is most common in North America, OLACEFS, PASAI, ASOSAI and AFROSAI-E, while only around 40% of SAIs have a legal provision for auditing standards in ARABOSAI, CREFIAF and CAROSAI. SAI institutional models do not explain the regional differences.
[*] Generally Accepted Government Auditing Standards
The process SAIs undertake to adopt ISSAIs as auditing standards could be outlined as follows in the infographic below.15Steps for ISSAI adoption developed by IDI. While almost 2/3 of the SAI respondents have a provision in the audit act, only five SAIs report to have carried out all the steps. 24% of SAIs globally have not carried out any of the possible steps outlined for adopting ISSAIs as auditing standards. For SAIs that don’t have a provision in the legal framework, and therefore have adopted ISSAIs directly, 34% have not carried out any of the steps.
However, regional distribution tells us something about where the steps are most frequently applied. Establishing the legal basis for adopting ISSAIs as authoritative standards was carried out by 41% in ASOSAI and 39% in AFROSAI-E. Another step, carrying out a detailed study on the rationale for adopting ISSAIs was done by 47% of SAIs in OLACEFS, making it the region where this practice was most widespread. This could also explain the varied practices of ISSAI adoption in OLACEFS, as a better understanding could lead to a better adapted solution. 40% of SAIs here also developed an implementation plan for the adopted standard. In AFROSAI-E the Head of SAI issued an Executive order for the adoption of ISSAIs as the audit standard in 43% of SAIs, while the same was the case in 40% of SAIs in OLACEFS. Public notification of the adoption was also most commonly done in AFROSAI-E and OLACEFS. While these results beg more questions and needs to be studied further, the adherence to the process according to regions, nevertheless, seems to confirm earlier Stocktakes where SAIs models and regional context have shown to affect the both the adoption and application of the ISSAIs. And while there is uniform willingness to adopt ISSAIs across INTOSAI, the practical application of a systematic process is still limited.
[15] Steps for ISSAI adoption developed by IDI.
Figure 34 – Practices during the audit standard adoption
Another aspect of ISSAI implementation relates to the way SAIs organise their audit engagements. The GSR2020 suggested that the tendency to combine several audit type objectives in the same engagement made it more difficult to comply with the standards. Given the complexity of the standards, when conducting audits with several engagement objectives, one may struggle to meet the objectives of the individual audit disciplines. The results from the Global Survey 2023 show a small increase towards engagements with only financial, performance and compliance audit objectives respectively. For both financial and compliance audit, there is an increase in number of SAIs, with 46% who organise audits engagement with only these objectives (36% and 35% in GSR2020). The increase seems to come from a move away from combined audits16Combined audits can an engagement which combined two or three audit objectives. Most commonly it is a one that combines two., that is audits with both financial, compliance and performance objectives.
Figure 35 – SAI application of audit objectives in audit engagements
[16] Combined audits can an engagement which combined two or three audit objectives. Most commonly it is a one that combines two.
Slow progress in ISSAI Implementation
In the following section, we are assessing the way SAIs have implemented the core audit disciplines in an attempt to assess performance and uncover any aspects which could help improve audit quality or that pose a risk to audit quality. We also look at audit coverage.
The main audit types
Compliance Audit
The objective of public-sector compliance auditing, (..), is to enable the SAI to assess whether the activities of public-sector entities are in accordance with the authorities governing those entities. This involves reporting on the degree to which the audited entity complies with established criteria. (Source: ISSAI 400 Paragraph 13)
Financial Audit
The objective of financial audit is, through the collection of sufficient appropriate evidence, to provide reasonable assurance to the users, in the form of an audit opinion and/or report, as to whether the financial statements or other forms of presentation of financial information are fairly and/or in all material respects presented in accordance with the applicable financial reporting and regulatory framework. (Source: ISSAI 200 Paragraph 8)
Performance Audit
Focuses on whether interventions, programmes and institutions are performing in accordance with the principles of economy, efficiency and effectiveness and whether there is room for improvement. Performance is examined against suitable criteria, and the causes of deviations from those criteria or other problems are analysed. The aim is to answer key audit questions and to provide recommendations for improvement. (Source: ISSAI 100)
ISSAI standards are the departure point for enabling high-quality audits. Starting with financial audit, 54% SAIs have adopted financial audit ISSAIs as their authoritative standards. 18 % of SAIs adopted national standards consistent with ISSAIs, and 17% have adopted standards based on ISSAIs. SAI PMF data can help us understand the quality of these standards. For financial audit, 70% of the SAI PMF sample meets the benchmark for the indicator for quality financial audit standards, indicating that 2/3 of SAIs globally have financial audit standards aligned with the ISSAIs.
The SAI PMF sample results on audit practices indicate that SAIs continue to face the same issues as in previous GSRs, with only 25% meeting the overall benchmark for financial audit process. Hereunder, 26% meet the benchmark for planning. The proportion meeting the benchmark on the audit implementation is slightly higher at 32%, but this could also be due to comprehensive guidance, prescribing the audit process steps in detail. The results are unchanged from 2020 for reporting on the financial audit, at 35%. Despite these obvious limitations, 80 % of SAIs report to issue audit opinions based on reasonable assurance for all financial audit engagements.
According to Global Survey data, 68% of SAIs conducting financial audits, meets the benchmark of auditing at least 75% of the financial statements they received. SAI PMF data suggests the prevalence could be lower (46%). Assessing the self-reported data from the Global Survey based on regional distribution shows that AFROSAI-E and EUROSAI are the regions where SAIs meet the benchmarks most commonly, together with PASAI and North America. This regional distribution concurs with the SAI PMF sample. These are also the regions reporting to conduct audits according to financial audit objectives only, most frequently.
Figure 36 – PEFA 30.1 Audit coverage and standards by INTOSAI Regions
Further, analysis of results from assessments using the Public Expenditure and Financial Accountability (PEFA) framework gives us insight into results on financial audit coverage through PI-30.1. This sub-indicator assesses both coverage and application of standards, but criteria for getting top scores are more comprehensive than the SAI PMF benchmark17For coverage, scores of A and B which equal the financial audit benchmark applied in this report, is also accompanied by criteria on coverage of three consecutive years, and furthermore the revelation of critical findings. More importantly, the INTOSAI benchmark only refers to financial statements received. The Global Survey doesn’t ask respondents to clarify the proportion of received statements.. The proportion of countries meeting the criteria equal to the INTOSAI benchmark (over 75% of received financial statements are audited), is similar to the SAI PMF results (46%), but again, the regional distribution suggests that AFROSAI-E and EUROSAI are above to the self-reported averages, together with CAROSAI. It also confirms that regions like CREFIAF are less likely to meet the criteria. Finally, it should be noted that while the Global Survey asks SAIs to report for the last year, both SAI PMF and PEFA analysis is based on samples of cumulative data, which could mean that some SAIs in the samples could have improved practices since the assessment were carried out.
[17] For coverage, scores of A and B which equal the financial audit benchmark applied in this report, is also accompanied by criteria on coverage of three consecutive years, and furthermore the revelation of critical findings. More importantly, the INTOSAI benchmark only refers to financial statements received. The Global Survey doesn’t ask respondents to clarify the proportion of received statements.
Use of SAI PMF to assess audit practices
The SAI Performance Measurement Framework (SAI PMF) is a INTOSAI developed and owned performance assessment tool, which aims to assess all aspects of SAI Performance. IDI has a unique collection of SAI PMF results. The official number of assessments amounts to 108 assessments. A SAI PMF is recommended to be carried out every 4-5 year, therefore many SAIs have only done one assessment, making comparisons over time difficult so far.
Former attempts to collect data on ISSAI compliance through the Global Survey suggests this aspect of performance is particularly difficult to evaluate. While the SAI PMF assesses all aspects of performance, a key asset is its evaluation of audit practices, based on review of audit files, which provides insight in audit quality across the organisation, against the ISSAIs. The GSR2023 analyses a sample of SAI PMF indicators on audit implementation indicators to assess the quality of audit processes, and to present this as a proxy for audit quality.
The use of samples from the growing population of reports seems to suggest that even though the samples changes, between the exercises, and the size of the population is modest, the changes over time are rather small.
The SAI PMF scores the indicators through scores from 0 to 4, where 4 is the best practice. Throughout the GSR2023 a score of 3 or above is referred to the benchmark for good audit practices. When referring to SAIs meeting the benchmark in this text, this is what is meant. The indicators are built up by components, which have the same scoring range, and where a conversion table translates the components into the indicator score. Sometime the component score is referred to in the text.
The Global Survey 2023 suggests there is a variation in how SAIs adopt compliance audit standards. Only 48% has adopted the compliance audit ISSAIs as authoritative standards, which is the same result as in the GSR2020, while 17% of SAIs have adopted national standards consistent with ISSAI 400 compliance audit. Another 19% developed their own standards based on the ISSAIs. As previously, direct adoption seems to be more common in Lower Income countries.
For compliance audit the GSR2020 suggested less than 20% of SAIs conduct high-quality audits. The SAI PMF sample shows that SAIs meeting the benchmark for the audit process in 2023 is 16%. To better understand what lies behind the result, we look closer at INTOSAI regions. In AFROSAI-E and EUROSAI there seems to be an increase in the number of SAIs who organise audit engagement with only compliance audit objectives. In PASAI, OLACEFS, CREFIAF and ARABOSAI less than one-third of conducting audit with sole compliance audit objectives. This suggests that even if there are regional improvements, it may take some time to see an overall global improvement.
Figure 37 – SAI audit engagement with compliance audit objectives only
by INTOSAI Regions
A positive starting point is that 52% of SAIs have compliance audit standards that meets the quality benchmark from SAI PMF and are greatly aligned with ISSAI 400. Still, for the conduct of audit, this proportion is more than halved, with only 21% of SAIs meeting the benchmark for planning and the implementation of the audit. Standards for compliance audit reporting are met by a larger number of SAIs, 31%. When it comes to coverage, 55% report to meet the benchmark for compliance audit coverage, notably that the SAIs has a documented risk basis for selecting audits, and at least 60% (by value) of the audited entities within their mandate were subject to a compliance audit in the last year, which the graphs further below show is a decline since GSR2020. The most concerning aspect about compliance audit coverage, however, is that as many as 41% of SAIs do not apply a documented risk basis for selecting audit entities, which means that for even the 11% who despite this was able to subject at least 60% of entities to compliance audit, these audits done may have even less impacts because of the entities chosen, and also may again affect the quality of the planning of the audit. SAI PMF results on coverage confirm that results are concerning with 23% meeting the benchmark during assessments.
Figure 38 – Performance audit standards developed or adopted by SAI Regions
Finally, for performance audit, 52% of SAIs have adopted the performance audit standards as authoritative standards. Interestingly, the adoption of ISSAIs as authoritative standards in AFROSAI-E are almost universal, with 91%. This is followed by CAROSAI and EUROSAI, with 57% and 54% respectively. In ASOSAI and OLACEFS the most common approach is to develop own standards based on ISSAI, done by 47% and 53% of members respectively. For PASAI, there’s an equal proportion of SAIs who either adopts the ISSAI directly or have adopted national standards aligned with the ISSAIs.
The SAI PMF sample confirms that performance audit practices are more aligned with ISSAI standards than financial and compliance audit practices. This starts with the 70 % of SAIs who have performance audit standards meeting the benchmark. The quality of the standards also seems to be better reflected in the practice, where the audit process is characterized by 36% of SAIs meeting the criteria for planning, and 47% meeting the criteria for implementing the audit, and 61% for reporting. When it comes to audit coverage 56% of SAIs report to have spent 20% of their resources or completed 10 audit reports. It is their resources or completed 10 audit reports. It is likely that these SAIs, with a regular and systematic performance audit practice, are covered by the SAI PMF sample, helping to increase results. Running the data against other variables, show that meeting the audit coverage benchmark is more likely to happen in SAIs in liberal democracies (83%). This could make sense from the view point those liberal democracies, in addition to be more economically advanced, also have more open exchange of ideas, and that the concept of performance audit, which aims to improve government performance, could meet less obstacles.
Looking closer at audit coverage as an indicator of audit quality, suggests that there is a continued variation across the audit types and over time. Since the GSR2020, there’s been an increase in coverage in financial and performance audits, but a decrease in compliance audit coverage. The graphs below reveal an inverse pattern from the GSR2020 time series. It’s possible that while SAI resources stay approximately the same, priorities change, which could explain the waves in engagements.
Figure 39 – Audit coverage over time for compliance, financial and performance audit
by income level
Jurisdictional control activities need to apply and document risk analysis
Out of the 166 respondents in the Global Survey 23, 19% reported to have the mandate to conduct jurisdictional control activities. This is the same proportion of SAIs who reported this mandate in the previous Stocktake.
A jurisdictional mission (as it is known as), is most widespread in CREFIAF, where around 80% have a jurisdictional mission through their establishment as a court, chamber or section of accounts. They are followed by OLACEFS and EUROSAI. The regional distribution of this sample will also necessarily affect the results. It’s worth noting that amongst the 40% from OLACEFS, these SAIs are also part of the Legislature SAI model, which means their institutional set up is different, and accentuates other parts of jurisdictional control activities than what may be the case in a jurisdictional model SAI.
According to the Global Survey 23, almost 80% of the respondents carry out control and judgment of accounts. In CREFIAF all SAIs with a jurisdictional mandate do this. In other regions where SAIs adhere to a Legislature or other model, the main activities differ. 65% of the SAIs judge cases of mismanagement which usually are uncovered through audits. This seems to be a main motivation for ASOSAI and OLACEFS SAIs, where SAIs also represents the Legislature model. 71% of all respondents report that they sanction accountants and managers, based on the results of the activities presented. This is common in ARABOSAI, followed by EUROSAI and CREFIAF. Out of the accounts received on average, around 40% were judged, and out of these around 40% published.
Another activity mandated to SAIs with jurisdictional competencies is the control of the Budget Execution, which is intended to inform the Parliament. This is carried out by half of SAIs, and the mandate is most common in CREFIAF, followed by EUROSAI. In ASOSAI where SAIs have jurisdictional mandates but not a jurisdictional model, this is not done. Currently certification of accounts is only done by a handful of SAIs (29%), without any clear regional concentration.
Figure 40 - Has your SAI developed or adopted principles and/or standards for its jurisdictional activities?
Of the 20% of SAIs with a jurisdictional mission, 42% have developed and adopted principles or standards they deem to be consistent with INTOSAI P-50. This is an increase compared to GSR2020 when 28% reported the same, although in reality a small one, given the small group of respondents. The same proportion reports their standard is either not consistent with P-50 or they have not assessed their standards against it. Another 16% have not adopted standards for their jurisdictional activities.
58% of SAIs who carry out jurisdictional control separately to other audit engagement. 61% of these do not carry out additional control combined with other engagements. 35% combine jurisdictional control with compliance audit, and another 32% report to combine several objectives.
When asked about their approach to choosing entities to control, 55% respond entities are selected through a documented process, considering resources available to the SAI, risk and materiality, while 35% respond that their process ensure that all accounts are examined within a reasonable time period. This suggests that most SAIs conducting jurisdictional activities have a systematic approach, but that more than one third needs to document it better, and that resources available for all can limit implementation. This last point also accentuates the need for these SAIs to apply risk analysis, to make sure that their control is not only regular, but also reactive and relevant according to emerging risks in the management of certain accounts.
Figure 41 – Professional Capacity Development | Recent and Planned
Bars show professional capacity development areas over 2020−2022, with plans for 2023−2025; Based on responses from 90 developing−country SAIs
Despite the slow progress on ISSAI Implementation, SAIs have made efforts to improve their audit practices. More than 60% of SAIs in developing countries have received capacity development support to develop their professional audit capacity during the period 2020-2022, more precisely 62% for compliance audit 69% for financial audit and 75% for performance audit. Capacity development support in the audit disciplines is the most frequently received support across all types of capacity development areas. Comparison with the results from 2020 indicate that the proportion of SAIs receiving support in these audit disciplines during 2020-2022 are almost the same as those who received support during 2017-2019. However, for compliance and performance audit the total support received was less than what was projected by the SAIs. For performance audit 71% of SAI received support, against 82% that planned building capacities going forward, and for compliance audit 55% received support against the 66% planned to receive support. It’s likely that the duration of COVID-19 could have disturbed these plans. However, it could also suggest that some SAIs who needed support in these areas moved away from ambitions after not receiving the support. In fact, fewer SAIs are planning to build capacities in the audit types in the ongoing period (2023-2025), as illustrated in the graph below. Still, it seems like SAIs priority is increasingly geared towards professional development, use of technology and audit quality and reporting. The latter may be a positive sign for the future capacity in audit quality management and professionalisation, which will be discussed in the next sections.
Quality management systems still have
potential to improve
As was pointed out in GSR2020, audit quality management systems and practices seem to play a particularly important role in developing good audit practices. Results for financial, compliance and performance audits are all within the same range, so the analysis below presents the results jointly for all audit types. Around 85% of SAIs have defined policies and procedures for ensuring quality of the audit processes for financial and performance audit, with a slightly lower proportion for compliance audit (80%). Quality management at the engagement level takes place in 73% of SAIs across the audit disciplines. 61% have a system for assessment of risks to quality. Two-thirds of SAIs have a system for monitoring quality, but still as many as 28% of SAIs do not have a monitoring function in place for any of the audit types. Yet, the result is a significant improvement since Global Survey 2020, where 39% of SAIs reported to not have any monitoring systems in place. Furthermore 29% of SAIs do not issue conclusions on the quality control system based on the monitoring, through a function established at the organisational level, and 37% of SAIs haven’t put in place such a unit.
SAI PMF assessments evaluate the quality control functions based on a combined assessment of the system in place, and an audit sample. These data show that the percentage of SAIs meeting the benchmarks for quality control (now referred to as quality management at the engagement level), are considerably lower than the reported existence of systems, with 39% for compliance audit, 44% for performance audit and 51% for financial audit. These numbers still indicate an improvement since the last Stocktake for compliance audit, where percentages are up by 8 points.18The sample size is smaller, but for this study 5-7% is considered to indicate an improvement. These findings seem to echo the findings on ISSAI adoption, that while SAIs are making efforts to put in place standards and systems, these systems and processes are not always of sufficient quality, and for that reason SAI performance in the audit process does not seem to improve materially over shorter time periods. The findings on quality management for example, suggests that while SAIs put in place procedures and policies for the audit process, the holistic and continual assessment of the quality in the audits, through quality management units at the organisational level, risk assessments, monitoring and assessment of quality management at the engagement level are missing in many SAIs. This could pose as an obstacle to the identification of measures to mitigate and improve audit practices. Similarly, only 34% of SAIs have a dedicated department for methodology development, also indicating a lack in capacities to systematically dissect and address audit quality issues through improvement in audit methods. Shortages in an organisational level focus on audit quality, could be one of the factors continuing to hinder SAIs in improving their audits. This also leads us to the next part of this chapter, notably the development of audit competencies of staff.
[18] The sample size is smaller, but for this study 5-7% is considered to indicate an improvement.
Figure 42 – SAI approaches to audit methodology and enhancement
Insufficient emphasis on defining audit
competencies necessary to
professionalise audit staff
As well as creating systems that ensure audits are carried out in compliance with the ISSAIs, SAIs need to establish opportunities for staff to build their professional capacities as auditors. Conducting high quality audits depends on SAI’s ability to create an environment where these learning and development opportunities exist, either through internal programmes or external support. For staff development, quality starts by defining the competencies necessary to do the job.
The starting point for identifying needs for improving staff competencies is an assessment of the staff resources available. According to the Global Survey 2023, only 37% of SAIs find their current staff to be adequate both in terms of size and competencies, almost identical results as in 2020 (39%). 32% of SAIs find staffing to be inadequate in terms of staff numbers, also indicating that a heavier workload would be needed from the staff available. 20% of SAIs find that neither competencies nor numbers are adequate, and another 10% find the competencies of staff to be inadequate. Interestingly, while there is a pattern related to income levels and staff adequacy, more than 40% of SAIs in HI countries still find their human resources to be inadequate either when it comes to numbers, competency, or both. There is also a big difference between SIDS, and non-SIDs with 11% against 47% rating their resources as adequate. The same is the case comparing SAIs in fragile countries against SAI in non-fragile contexts. These results also pre-empts the regional analysis, which confirms that 40% of SAIs in CREFIAF, 35% of SAIs in CAROSAI, 30% in AFROSAI-E and 28% in PASAI, find current staffing inadequate.
The responses to the Global Survey 2023 shows that only 66% of SAIs have adopted a competency framework, a system for mapping the necessary professional skills. A quarter of SAIs report to not yet have a competency framework for their auditors. Analysis reveals that financial, compliance and performance auditor competency frameworks only exist in half of SAIs globally. The same applies for jurisdictional competencies for those SAIs who have this mandate. Most SAIs carry out audit engagement with a combination of the audit objectives, for example a combination between financial and compliance audit, which means that SAIs should cover necessary competencies for these two audits in their frameworks. It’s interesting that numbers are equally low for cross-cutting competencies and unique skills to the SAIs, suggesting that the definition of competencies overall, is lacking, not only due to the specific audit approaches SAI take. Although the skills weren’t outlined in detail in the survey question, responses imply that skills ranging from knowledge about country PMF systems, to the overall principles for public sector audit found in ISSAI 100, aren’t explicitly outlined as competency needed in the audit profession, by half of SAIs.
Figure 43 – SAI competency frameworks and what they cover
In AFROSAI-E the three audit disciplines are most frequently covered in the competency framework. Financial audit is covered by 74% with 65% for compliance and performance audit. 61% also report to cover cross-cutting competencies, while EUROSAI is the region where SAI-specific skills are covered most often, by 62% of SAIs.
If we look to the SAI PMF data, assessment of team skills and competencies are assessed in connection with assessments of audits. Results suggest that overall team management and skills for each audit discipline is relatively weak, with 46% meeting the benchmark for performance audit, 37% for financial audit and only 33% for compliance audit. These findings both confirm the shortages seen in the existence of frameworks and can offer an explanation to the limitations in performance in the audits.
Subsequently, it is therefore important to look at how SAIs assess the competencies of their staff. Given the low proportion of SAIs with a fully developed competency framework it is hardly surprising that only 39% of SAIs have a mechanism to assess auditor competence against a competency framework. Even fewer, 33% of SAIs, report to have mechanisms to promote and assess the success of continuing professional development. This means that even if SAIs do invest in their staff by offering and enrolling them in professional development programmes, only one-third is able to evaluate the effect of these investments and further, are unlikely to have mechanisms to ensure that new skills and competencies come to good use through application and further roll-out. Such SAI organisational capabilities to apply and manage knowledge and expertise across the organisation, or lack therefore, is likely one of the key factors determining whether SAIs succeed in ISSAI implementation.
Staff competency can be built through directed human resource strategies and dedicated professionalisation programmes. 57% of SAIs report to have built its human resource management processes (within its control) around an auditor competency framework. The proportions are higher than the global average in North America, EUROSAI, ARABOSAI and AFROSAI-E. The low global proportion makes sense in light of the limited number of SAIs that adopted a competency framework. In CREFIAF as many as 33% report that they are not in control of their own recruitment processes, and therefore having in place a competency framework is not applicable for them. The same applies to 26% of SAIs in CAROSAI. In these regions auditor competency frameworks are established for only 27% and 35% of SAIs respectively.
When asked about professional development programmes, SAIs rely most commonly on in-house development programmes which are not regulated by any other organ. For financial audit this is common in North America (100%), EUROSAI (87%) and ASOSAI (80%). Considering the staff and resources needed to develop and run such a programme, it is not surprising that this approach is used less in PASAI (28%) and CAROSAI (26%) with many small SAIs. The regional pattern is similar for performance and compliance audit. For performance audit in-house programmes exist in 71% of SAIs in ARABOSAI, 88% in ASOSAI, 82% in EUROSAI, and 100% in North America. The last results could be tied to the fact that these regions also correlate with a higher proportion of HI countries with sufficient resources, and that SAIs from North America have adopted national standards for performance audit, creating a need for specialised training in the field.
Figure 44 – SAI approaches for professional development according to audit stream
In-house programmes regulated by an external professional body is the least common approach across audit types, which only one-fifth of SAIs relying on this approach. The practice is most widespread in ASOSAI where 53% report to have this arrangement.
Reliance on building pathways through external programmes such as university programmes, is less common than in-house, but here again we see regional differences. For financial audit (38%) this approach is used by 57% in AFROSAI-E, 50% in ARABOSAI, 53% ASOSAI and 47% in OLACEFS, but only by 13% in CREFIAF, suggesting that there could either be institutional aspects or few professional service providers available. Another aspect is of course financial resources through the payment of tuition fees. According to the Global Survey only 7 %o SAIs in CREFIAF consider themselves to have sufficient financial resources. Another explanation could also be that financial audit is not widespread in CREFIAF, however, also for compliance audit the proportion of SAIs in CREFIAF resorting this approach is low, with 20%. The practice is more widespread in ASOSAI (59%), AFROSAI-E (52%) and OLACEFS (50%). However, it should also be noted that the extent of this practice, and the proportion of auditor it is offered to, is not captured by the Global Survey.
Finally, when we look at these results, also considering the SAIs that have a competency framework, it is only one-third of SAIs having adopted competency frameworks covering financial, compliance or performance audit, and also have established in-house professional development schemes. However, SAIs who adopted the relevant framework have a higher proportion of professionalisation pathways in place across all audit types, suggesting that defining competencies helps advancing the professionalisation journey.
In sum, the limitations in today’s SAI practices pose a risk to SAIs ability to advance in the professionalisation of audit staff. Many SAIs are struggling with ensuring their audit staff have the appropriate skills. This is partly due to lack of resources, but regardless of the structural challenges, it’s clear that a lack of defined auditor competencies, and assessment mechanisms for the competencies, lies at the heart of this challenge. With as many as 60% of SAIs aim to offer in-house training across audit types as the main pathway for professionalisation of their auditors, this competency building approach will be the main approach for many SAI. But if these pathways are not based on comprehensive competency framework, and supplemented by continuous assessment of quality like this chapter results suggests, there is a risk that impact of trainings and ultimately on audit quality will be limited.
Reduction in peer support during COVID could explain continued challenges in SAI professionalisation
Throughout the years, there’s been a continuous message about the preference of SAIs to receive support from peers, because of their unique insight and understanding of INTOSAI standards and public sector audit, a specialised and often sensitive exercise. Therefore, it is surprising that SAIs in the Global Survey 2023, indicated that their preference for support leaned more towards international development partners,19SAIs receive support from different type of partners. Development partners could for SAIs encompass bilateral donors, multilateral donors, implementers, Embassy channelled funding, support from UN agencies etc. followed by the INTOSAI region, while SAI peers from the same region, or another INTOSAI region came in as third and fourth preference, respectively. The explanation to this, could be the dramatic reduction of SAIs who report to have provided peer support, from 71 during 2017-2019, to only 42 during 2020-2022. This continues the decline from the GSR2017, when 87 SAIs reported to have provided peer support. But in light of these numbers, it’s also worth to note that both GSR2020 and a recent EU-funded study (which partly based itself on GSR2020 data) demonstrated that there is need for a more harmonised understanding of what peer to peer support entails.20Peer-to-Peer Capacity Development Support to Supreme Audit Institutions. ECORYS. 2023. Also, a major explanation to the latest development probably comes from COVID-19, with travel restrictions and reduced activity level across INTOSAI. 70% of SAIs providing support state that their own staff is used to deliver the support most of the time while includes physical visits, while only 24% provided remote support regularly, suggesting that travel restrictions would severely hamper implementation of support. In addition, the global uncertainty and turbulence during the period examined, would likely affect the ability for SAIs to plan for such support, considering that half of SAIs are dependent on external funding to implement support. It is also worth noting that 29% of provider SAIs initiate the support most of the time, and according to 38% mostly determined based on their own priorities, and finally that for 37% of the SAIs offering support, the support period exceeds a year.
Figure 45 - Modalities for funding peer support provision
As suggested above, there’s been a preference among SAIs to seek support for capacity development in performance audit, professionalisation and audit quality. This aligns well with the presumed expertise offered by SAI peers, and the support they have reported to provide in the last period. According to the Global Survey responses, peer SAIs most often provided support in the following areas: organisational control, overall audit planning, audit quality and reporting and performance audit, followed by financial and compliance audit. These were provided by almost 60% of the SAIs providing peer support. In addition to available funding, the top factors for deciding to provide peer support, were the capacity development areas needed, and a match to the providers expertise. Hence it is possible that the drop in peer support has led to a slowdown in capacity development efforts that could have contributed to better audit performance.
Out of those who provided support in the last period, 80% are willing to continue providing support, 30% of them explicitly state they need financial support to do so. Given the long-term investment it is to build the professional capacity of a SAI, and improve audit quality, and the observed challenges in the chapter above, it seems important to continue to ensure peer involvement in these efforts, so to ensure that SAI expertise can provide support adapted to SAI needs.
[19] SAIs receive support from different type of partners. Development partners could for SAIs encompass bilateral donors, multilateral donors, implementers, Embassy channelled funding, support from UN agencies etc.
[20] Peer-to-Peer Capacity Development Support to Supreme Audit Institutions. ECORYS. 2023.
