Harmonization Project
FAS Meeting 2012
Harmonization project and ISSAI 200
• Purpose and scope of the project
• The purpose is to provide a conceptual basis for public sector
auditing and ensure consistency in the ISSAI framework.
• Goals:
• A: Revise the ISSAI 100-999 Fundamental Auditing
Principles, in order to ensure that:
• they describe the general role and auditing function of a SAI and
are relevant and useful for all members of INTOSAI;
• they provide overview and further references to the full set of
ISSAIs where more operational guidance is provided;
• they provide a consistent set of concepts and an improved link
between ISSAI 1 The Lima Declaration and the new set of
comprehensive guidelines that are launched in 2010
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Harmonization project
• B: Make the limited editorial changes in ISSAIs 10-99 which
are necessary in order to carry the revision of ISSAIs 100-999
through and improve consistency between the two levels of
documents.
• C: Ensure alignment between the ISSAI 1000-4999
Implementation Guidelines and the new set of ISSAIs 100-999
Fundamental Auditing Principles. The alignment includes:
• consolidating the terminology of the full set of ISSAIs 100-4999 in
accordance with a general glossary for the ISSAI Framework and
ensure updated cross-references between the different ISSAIs;
• considering the extent to which there is a need to make further
amendments in the ISSAI 1000-4999 guidelines as a consequence
of new ISSAIs 100-999 Fundamental Auditing Principles, e.g. in
areas where text is moved from the guidelines to the principles, or
where unintended differences between the different sets of
guidelines exist.
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Harmonization Project
• 4 new ISSAIs on level 3
• ISSAi 100 Fundamental Principles of Public Sector
Auditing
• ISSAI 200 Fundamental principles of Financial
Audit
• ISSAI 300 Fundamental Principles of Performance
Audit
• ISSAI 400 Fundamental Principles of Compliance
Audit
Harmonization Project
• ISSAI 100- approved for exposure by PSC in
June 2012.
• ISSAI 200- will be approved for exposure by
PSC following a written procedure in October
• ISSAI 300- approved for exposure by PSC in
June 2012.
• ISSAI 400- will be approved for exposure by
PSC following a written procedure in October
ISSAI 100- structure
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Purpose and Authority
Framework
Elements
Principles to be applied
Making Reference to the ISSAIs
• ISSAI 200-400 will basically follow the same
structure
ISSAI 100
• Purpose: ” to provide the fundamental principles which are
applicable to all public sector audit engagements whatever its
form or context”.
• Authority: The Fundamental Auditing Principles represent the
core of the detailed auditing standards contained on level 4 of
the ISSAI framework. The principles can be used in two ways:
• To form the basis on which standards are developed, or on
which consistent national standards are adopted.
• To form the basis for adoption of the General Auditing
Guidelines (ISSAIs 1000-4999) as authoritative standards.
ISSAI 100 – General Principles
Ethics & Independence
Quality control
Audit / engagement risk
Engagement team management & skills
Communication with auditees and other stakeholders
Documentation
Professional scepticism and judgement
Materiality
ISSAI 100- Principles related to the audit process
18 High Level Principles formulated
ISSAI 200-400
• The ISSAI 200, 300 and 400 further elaborate on the principles
to be applied in the context of financial auditing, performance
auditing and compliance auditing.
• ISSAI 200-400 also adds principles identified as fundamental for
the type of audit
• Note:
• The project is under high time pressure- no time for
alignement between 100-200-300-400
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ISSAI 200 Main Challenges
• To condense the more than 600 requirements
in ISSAI 1000-1810 into a few principles
• To make sure it is not understood as a
substitute for the ISAs
• To explain a process in a short document that
originates from 1220 pages
Goal
• As far as possible a common structure with
ISSAI 100
• To be read as ”Stand alone document”
• To provide principles to all relevant areas
covered by the ISAs (36 ISAs into one
document)
ISSAI 200 based on
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ISSAI 1200-1810
ISSAI 1000
IFAC Framework
A few parts of extant ISSAI 100-400
IPSAS 1
ISSAI 200 is developed with the
following premises
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Relates to audits of financial statements
A Financial Reporting Framework that is acceptable
Adherence to Ethical and Quality Control Standards
Reasonable Assurance
Authority
• Different views within the project group;
• No authority at all
• To be standards to malke reference to if
SAIs cant achieve adherense to level 4
• Something else
Use of ISSAI 200
• For SAIs applying the ISSAIs 1000-1810 as
authoritative standard – No practical use
• For SAIs adopting other national standards as
authoritative standards- Provides an option to
benchmark those against best practice of INTOSAI
and if consistent to make such statements.
• For SAIs developing their own authoritative
standards- Provides an option to benchmark those
against best practice of INTOSAI and if consistent to
make such statements.
ISSAI 200- 26 Principles
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Ethical requirements
Quality Control
requirements
Engagement team and
management skills
Engagement Risk
Professional Judgment
and professional
skepticism
Materiality
Agreeing the Terms of
the Engagement
Documentation
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Communication
Planning
Understanding the audited
organization
Risk assessment
Responses to assessed risks
Considerations relating to fraud in
an audit of financial statements
Considerations of Going Concern
Considerations relating to laws and
regulations in an audit of financial
statements
Audit Evidence
Considerations of subsequent
events
Evaluating misstatements
Forming an Opinion and Reporting
on the Financial Statements
Considerations relevant for audits
of the whole of government
financial statements
ISSAI 200
• General comments and views on the project
and in specific ISSAI 200;
• Authority?
• Structure?
• Level of detail?
• The relationship to other ISSAIs
• Detailed comments section by section
• What are the implications for ISSAI 10001810?
ISSUES TO DISCUSS
• Clarifying the distinction between level 3 and level 4 of ISSAIs,
• Clarifying the distinction between ISSAI 100 and ISSAI 200,
• Clarifying what is the difference between the General
Introduction to the INTOSAI Financial Audit Guidelines (see
ISSAI 1000) and Overall Objectives of the Independent Auditor
and the Conduct of an Audit in Accordance with the International
Standards on Auditing (See ISSAI 1200)(because these two
sections cover the basics) and the draft of ISSAI 200, and
• Clarifying whether the drafting style allows for reference to the
applicable section instead of repeating text.