Enhancing the Stakeholders’ Confidence:

Audit Management Integrity, Accountability and the Tone at the Top

Assoc. Prof. Dr. Recai AKYELThe President of Turkish Court Of Accounts

VII. EUROSAI-OLACEFS ConferenceTbilisi

17-19 September 2012

CONTENT

Conceptual terms: stakeholder confidence, audit management integrity, accountability, tone at the top and their relevance for SAIs

Means to quality audit Experience of Turkish Court of

Accounts

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Enhancing the Stakeholders’ Confidence

“Quality within any organization is not achieved spontaneously; but requires a specific approach led by management.” (EUROSAI Report)

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Concepts

• Stakeholders’ confidence

• Audit management integrity

• Accountability

• Tone at the top4

Stakeholders’ Confidence

Who are the stakeholders of an SAI?- Auditees- Citizens- Civil Society Organizations (CSOs)- Parliament

What does stakeholders’ confidence mean? Trust of the Parliament, auditees and public, in

general, to the outputs of SAI.

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Audit management integrity

Conditions:- Qualified auditors- Code of conduct- Open and well-defined audit

procedures- Adequate monitoring by management

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Accountability

The SAI should also be accountable to somebody.

Accountability of the SAI reinforces its independence by giving legitimacy to its actions. (Khan, 2007: 11)

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Tone at the top

“The standard set by the organization’s leadershipwhereby performance is measured; the culturewithin which the members of the organizationoperate; the tone set by senior management;irrespective of management’s documented strategyand policies, it is the force that drives individualprofessionals; the ‘unseen hand’ that direct activitiesregardless of management’s proximity to the action;and a commitment to the quality of care clientsreceive.” (IFAC Transnational Auditors Committee, 2007: 8)

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How to set right tone at the top

Set the strategy for meeting ethical standards and

quality, communicate the strategy internally and

externally.

Adopt international standards on quality control

Recruit competent and qualified staff

Review and evaluate the implementation of

quality management system

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Elements of a system of quality control

- Leadership responsibilities

- Relevant ethical requirements

- Acceptance and continuance of client

relationships

- Human resources

- Engagement performance

- Monitoring

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Audit Quality

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TONE AT THE TOP

Strategy

Quality Control System

Communication

Human resources

Ethical requirement

s

Monitoring

TCA EXPERIENCE

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Audit management integrity

Independence of TCA and auditors: Independence for publishing audit

reports Independence on audit scope Budgetary independence

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Human resources and ethics

Competent and qualified auditors 2 years of pre-vocational training and

internship On-the–job training TCA Law requiring adoption of code of

ethics

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Quality Control System

Quality Control Procedures for Audit Quality

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Hot review-Team leader

-Head of Group-Audit Planning

and Coordination Group

-Chambers-Report Evaluation

Board

Cold review-Audit Planning

and Coordination Group

- Internal peer review

Audit Management Software

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Accountability

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Meeting with the Speaker of the Turkish Parliament

The TCA Communication Strategy Document for Internal and External Communication

Annual Accountability Report

Strategic Plan for 2013-2017

Parliament being informed by the President of the TCA at least twice a year.

Transparency reports or publicity reports

Conclusion

SAIs should adhere to the principle of accountability themselves and ensure audit quality.

If SAIs manage to ensure audit quality and audit management integrity, then their contribution to good governance in public sector will be valuable and they will ensure enhancing the stakeholders’ confidence.

The management should set the right tone at the top to ensure audit quality.

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THANK YOU

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