TIAPS Module 1 Audit and Assurance workbook

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The principles of good governance can be applied holistically to an organization and to the public sector in its entirety. They can also be considered in the context of an individual project or initiative as well as groups of activities, such as IT governance, where matters are sufficiently complex and/or important to require specific attention not just on completion of tasks but also at a more strategic level. Governance takes account of factors such as risks, stakeholder needs, long-term planning and resource requirements, laws and regulations, and sustainability. The distinction between managing and governing is not absolute. The concepts as well as the roles of individuals tend to overlap. The chief executive officer (CEO) (i.e., secretary general, executive director, deputy minister, or similar) often sits at the intersection of the governing body and senior management. Most organizational responsibilities include some decision-making as well as oversight of and responsibility for resources and their utilization, including people and money. Monitoring and appropriate intervention are required by both managers and directors. Governing bodies involve themselves to a greater or lesser extent with both strategy and operations and are responsible for appointing (and firing) the CEO. While accepting the likelihood of overlap, in general terms we can make the following distinction: Focus of Governance • Overseeing • Advising • Guiding • Developing strategy • High level, long-term, big picture perspective • Non-executive decisions Focus of Management • Planning • Directing • Controlling • Implementing strategy • Operational, detailed, logistical perspective • Executive decisions The expression “those charged with governance” is often used to allow for the many differences that exist in how governance responsibilities are apportioned. It avoids arbitrarily limiting governance duties to the governing body (however that may be constituted) as well as removing the necessity of listing everyone who may be considered as holding governance responsibilities. Both the expression and the success of governance rely on clarity of exactly who is “charged with governance.” The primary stakeholders are assumed – explicitly or implicitly – to be the ones to “charge” the governing body and others with responsibility for governance and this links closely with the principle of accountability. When public officials are using public resources to achieve something on behalf of the public, they have a duty of care to the public for governance of those activities. Those charged with governance have both legal and ethical duties. 12
Although developed for government at a local level, the Council of Europe’s 12 Principles of Good Governance are relevant to most public sector bodies: 1. Participation, Representation, and Fair Conduct of Elections. 2. Responsiveness (to the expectations and needs of citizens.) 3. Efficiency and Effectiveness. 4. Openness and Transparency. 5. Rule of Law. 6. Ethical Conduct. 7. Competence and Capacity. 8. Innovation and Openness to Change. 9. Sustainability and Long-term Orientation. 10. Sound Financial Management. 11. Human Rights, Cultural Diversity, and Social Cohesion. 12. Accountability. 8 Albanian Context The president of Albania is the Head of State and commander in chief while the prime minister is the head of government. The highest executive authority rests with the prime minister and the cabinet (Council of Ministers) while parliament is the head of legislative power. The third branch – the judiciary – is independent from both the executive and legislative branches. Membership of the Council of Ministers includes ministers, deputy ministers, and secretaries general. Ministries may have varied internal structures and numbers of subordinated entities (known variously as directorates, agencies, centers, offices, authorities, academies, inspectorates, institutes, commissions, committees, services, and more). A subordinated entity is accountable to its line ministry. For the purposes of government, Albania is divided into 12 administrative counties and 61 municipalities. Albania was granted EU candidate country status in 2014 and this is a major driver for ongoing public administration reform at all levels as well as a impetus to implement public internal financial control (PIFC). For more detail on PIFC, refer to Module T3 Accounting Fundamentals. In accordance with Albanian law, all public entities are required to establish internal audit services, if not directly then via its superior institution (e.g., from the Ministry to a subordinated entity), from another public unit, or by contracted services. The head of the internal audit function should report to the head of the public unit. The Minister is appointed by the Prime Minister, is politically accountable for performance, and is the highest decision-making authority responsible for setting policy. The Secretary-General is the most senior civil servant in charge of executing policy. These factors are relevant for consideration and evaluation of internal audit independence. 8 12 Principles of Good Governance, Council of Europe, 2008. 13
Page 1 and 2: Module 1: Audit and Assurance TIAPS
Page 3 and 4: Table of Contents Module 1: Audit a
Page 5 and 6: Relevant Standards Reference is mad
Page 7 and 8: • Close scrutiny. The activities
Page 9 and 10: A.2 Public Sector Governance IIA In
Page 11: The need for governance arises for
Page 15 and 16: A.3 Governance Models When evaluati
Page 17 and 18: defensive aspects to minimize negat
Page 19 and 20: A.3.3 CIPFA International Framework
Page 21 and 22: 8. Ensure that its arrangements for
Page 23 and 24: • Consideration of overlapping in
Page 25 and 26: A.3: Reflection Which model or mod
Page 27 and 28: Although they are related, the prin
Page 29 and 30: B.1.1 Independence, Objectivity, an
Page 31 and 32: B.1: Reflection Is it possible to
Page 33 and 34: According to The IIA Position Paper
Page 35 and 36: B.2: Reflection When was the last t
Page 37 and 38: When independence or objectivity ar
Page 39 and 40: B.4 Safeguards for Independence and
Page 41 and 42: In other cases, there is no audit c
Page 43 and 44: C. Assurance and Advisory Engagemen
Page 45 and 46: It is common to build an allowance
Page 47 and 48: The following list is taken from Sa
Page 49 and 50: helping managers developing control
Page 51 and 52: C.1.5 Internal Audit Opinions Audit
Page 53 and 54: Leadership and Communication Intern
Page 55 and 56: C.2 Auditing Governance The IIA Sup
Page 57 and 58: C.2: Reflection How does your inter
Page 59 and 60: Fraud may be perpetrated via measur
Page 61 and 62: circumstances (unethical and often
Page 63 and 64:
Management Issues • Lack of area
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Risk management techniques can be a
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IT controls may be manual, automate
Page 69 and 70:
The IIA’s Cybersecurity Toolkit d
Page 71 and 72:
C.3: Reflection Fraud: How are susp
Page 73 and 74:
Global Perspectives and Insights -
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CIPFA: 77 Mansell Street, London E1
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TIAPS Module 1 Audit and Assurance workbook

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