Title: Presentation on audit quality management system ASOSAI research project by
Presentation on audit quality management system - ASOSAI research project by
2 7th ASOSAI Research Project
The 7th ASOSAI Research Project on Audit Quality Management System approved in 33rd Governing Board Meeting of the ASOSAI held in Manila in October 2003.
The objective of the project was to provide specific guidance to member SAIs in establishing an audit quality management system.
7 members opted to be the members of the research project
Bangladesh China India Malaysia Pakistan Philippines and Yemen with India chosen as the team leader.
The model for the 7th Research Project to be completed in 4 phases
The phase I of the project - compiling prevalent audit quality management practices both in private and public sector auditing.
In phase II Draft Audit quality management guidelines - prepared based on the findings from
Presentation of Interim Report to Governing Board at in December 2004.
During the phase III in 2005 audit quality management guidelines were to be piloted in a few SAIs.
In phase IV during 2006 the lessons from phase III are being reviewed a final document would be prepared presented to 36th Governing Board the 10th Assembly of ASOSAI in September 2006.
8 Board Actions 34th Governing Board of ASOSAI in Dec 04
Approved the Draft Guidelines on AQMS
Endorsed Phase III Strategies for implementation of the project
Called upon Phase III implementing SAIs to accord high priority to the Project
9 Milestones for the Research Project
Interim review of the progress at 35th Meeting of the GB took place in September 2005
Phase III of the Research Project completed in December 2005
The team carried out a wide search of the best practices for audit quality management in
Private sector auditing firms
Publications of professional Institute
Compilation of best practices documented separately
11 AQMS Guidelines
The team identified policies practices and guidance relating to the management processes that are present in SAIs
a) Leadership and Direction
b) Human Resource Management
c) Audit Performance
d) Client and Stakeholder Relations
e) Continuous Improvement
AUDIT QUALITY MANAGEMENT SYSTEM revolves around these management processes
12 AQMS Guidelines
These policies practices and guidance are contained in the six chapters which constitute these guidelines.
Compliance with the guidelines would provide reasonable assurance that the SAI conducts its audits to ensure high quality meet stakeholders expectations.
13 AQMS Guidelines
The guidelines have been designed for ensuring compliance with auditing standards in particular the INTOSAI auditing standards applicable legislative requirements and the office policies of the ASOSAI members.
14 Need for Quality
Quality has been defined as the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
15 Audit Quality Management
In public audit quality management involves a system composed of an organisation the Supreme Audit Institution (SAI) its people the auditors and the audit process all working together to produce outputs that fulfill the requirements of its stakeholders and the general public.
Each component of the Audit Quality Management System (AQMS) structure people and process aims towards customer satisfaction (in the context of the SAI its clients and stakeholders) which is always the bottom line of any organisation
17 Quality Management Principle
The quality management principle is the conceptual underpinning of AQMS.
It is a comprehensive and fundamental rule or belief for leading and managing an organization aimed at continually improving performance over the long term by focusing on the clients while addressing the needs of all other stakeholders.
It is essential to have in place quality management assurance and control policies and procedures in audit organizations
The SAI should ensure that these policies and procedures are subject to review mechanism
SAIs Quality Management System should be designed to provide reasonable assurance in the light of the likelihood and magnitude of potential risks that it conducts the audits both regularity and performance in accordance with the applicable legislative requirements rules and regulations Standards policy manuals guidelines and procedures.
20 Quality Continuum
The initial understanding of quality control was compliance to specifications and the quality control task was to identify and remove defects achieved mainly through some form of measurement and inspection activity.
21 Quality Control
Responsibility for quality was not with line functionaries but was vested with separate staff departments.
22 Quality Control
Quality a technical rather than a managerial function.
The requirements applicable to the day-to-day management of audit assignments
Quality control is product-centric.
23 Quality Continuum
Quality Assurance is understood as planned or systematic actions necessary to provide adequate confidence that a product or service will satisfy given requirements for quality
24 Quality Assurance
Policies systems and procedures established by SAIs to maintain a high standard of audit activity.
Quality Assurance is process centric
25 Quality Continuum
Quality Management System (QMS) is a broader concept which comprises the organizational structure procedures processes and resources needed to implement quality management.
26 Quality Management
It involves all processes in the operational life cycle of a service that affect quality from initial identification of clients needs to final satisfaction of requirements.
It is designed to provide confidence to clients and stakeholders that requirements for quality will be achieved in delivered services.
27 Quality Continuum
Total Quality Management
Total Quality Management (TQM) is a total organization wide effort through full involvement of the entire workforce and a focus on continuous improvement that organizations use to achieve clients satisfaction.
28 Quality Continuum - Total Quality Management
TQM is a comprehensive managerial philosophy and is a system of unyielding and continually improving effort by everyone in an organization to understand meet and exceed the expectations of clients at continually lower cost.
29 Quality Continuum
These AQMS guidelines are based primarily on quality management system principles. However they contain several significant elements of total quality management.
30 Quality Control in the Audit Process
Quality control is operational techniques and activities during audit processes of planning execution and reporting.
Quality control is a process in the course of which an SAI intends to fulfil quality requirements.
31 Quality Control Characteristics
Quality to be built into the audit process rather than relying on post audits or checklists
Responsibilities for each player in the control process be clearly defined
An efficient control process be put into place for effective implementation of AQMS
32 Quality Control Characteristics
Controls should be result focused
Too many controls result in no control
Practitioners of the AQMS should participate in the continuous evolution of the control framework.
33 Quality Control in the Audit Process
Quality control consists of all measures and procedures carried out within the audit process to guarantee the quality of audit work and of the resulting report.
34 Quality Control in the Audit Process
Quality control in the audit process provides reasonable assurance that
the audit has examined significant matters and
that the results of the audit contained in the audit report are an accurate reflection of the true conditions of the matters under consideration.
35 Quality Control in the Audit Process
For AQMS laying down quality control policies procedures and measures is the first pre-requisite
Detailed guidelines and checklists could be prepared by SAIs to ensure quality control in planning execution and reporting of audit
36 Quality Management
Quality Management encompasses both Quality Control and Quality Assurance
Quality Management goes beyond quality control in audit processes to include
Human Resource Management
Client Stakeholder Relations
37 Audit Quality Management System for ASOSAI member nations
Leadership and Direction
Human Resource Management
Client Stakeholder Relations
38 Audit Quality Management System
Leadership and Direction
Vision Mission Core Values and Auditing standards
Strategic Direction Planning
Strategic Audit Planning
Portfolio and Risk Management
39 Audit Quality Management System
Resourcing and recruitment
Training and capacity building
Performance Management appraisal
Personnel Welfare Benefits
40 Audit Quality Management System
Staffing for the audit
Other Tools Guidance
41 Audit Quality Management System Audit Performance
Internal Audit assesses whether operating systems within SAI function efficiently as per established policies procedures
Internal Quality Assurance Review assesses whether individual engagements are performed in terms of applicable standards policies guidance
45 Implementable Good Practices
Leadership and Direction
Establishment of Policy Unit for managing Strategic Planning Process
Audit Advisory Board
46 Implementable Good Practices
SAI may seek assistance from Experts and Specialists
Certificate Course in Performance Auditing with a University/academic institute
47 Implementable Good Practices
Exchange placements for SAI officials from other SAIs countries as reciprocal arrangements
Accept staff from other agencies legislative secretariat for temporary assignment
48 Implementable Good Practices- Human Resources
SAI to prepare an individual development plan
Naming honouring the Auditor of the year
High performers may be allowed to opt for training courses domestically and internationally
49 Implementable Good Practices
Electronic database of audited entity profiles
Quality assurance at various stages of the audit process
50 Implementable Good Practices
SAI to develop policy guidelines for forensic audit
An IT specialist to be member of all entities with ERP or other significant computer systems
51 Implementable Good Practices Audit Performance
Office INTRAnet site to have important guidance tools and other specialised material for audit
52 Implementable Good Practices
Quality Reviewer for major financial and performance audits
Consultation with specialists and experts
Multiple level review procedures for major audits
Managerial Quality Assurance
53 Implementable Good Practices Audit Performance
Performance Audit Management Committee
Specialist to help in drafting
Report Design Group
Audit reports of different SAIs to be discussed in presentation sessions
54 Implementable Good Practices Client Stakeholder Relations
Post-tabling report dissemination
Communicating the audit message to the public use of plain language
55 Illustrative Good Practices
Survey of the Legislators senior Government functionaries
Database of recommendations
Following up each major performance audit
56 Implementable Good Practices - Client Stakeholder Relations
More governance-centric themes to be taken up for discussion
Time-limit for response to committees recommendations
57 Illustrative Good Practices Client Stakeholder relations
Separate unit within SAI for liaison with legislative committees
Long term secondments of SAI functionaries to the legislative secretariats
58 Implementable Good Practices
Managing other external relations
Mutually supportive good relations with Ministries other agencies
Good relations with media
59 Implementable Good Practices
Effective professional relations with private sector auditors other professional associations
Good mutually beneficent relations with academic community
60 Implementable Good Practices Continuous Improvement
Summary of internal quality assurance reviews to be disseminated
Internal self-evaluation of audits
Good relations with other SAIs international organisations
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