Quality Assurance and Improvement
The Internal Auditor General Department has quality assurance and improvement programs which are designed to determine whether the audit unit’s internal quality control system is in place and is operating effectively to provide reasonable assurance that established policies and procedures and applicable auditing standards are being followed.
Regulation 161 of the Public Finance Management (National Government) Regulations 2015, provides that Internal auditors shall comply with the International Professional Practices Framework as issued by the Institute of Internal Auditors from time to time and shall conduct audits in accordance with policies and guidelines issued by the Public Sector Accounting Standards Board to ensure uniformity and consistency across national government.
International Standards for the professional practice of Internal Auditing (Standards), IPPF no. 1300 on Quality Assurance and Improvement Program provides that the chief audit executive must develop and maintain a quality assurance and improvement program that covers all aspects of the internal audit activity. According to IPPF No. 1311, the quality assurance and improvement program must include both internal and external assessments which results must be communicated to the senior management and the board according to IPPF No. 1320. In case of nonconformance with the Definition of Internal Auditing, the Code of Ethics or the Standards impacts the overall scope or operation of the internal audit activity, the chief audit executive must disclose the nonconformance and the impact to senior management and the board as stipulated in IPPF No. 1322.
The work of Internal Audit is controlled at each level of operation to ensure that a continuously effective level of performance is being maintained. Consequently, the Internal Auditor General develops and maintains a quality assurance programme designed to gain assurance that the work of Internal Audit, including Internal Audit Units in the Ministries, Departments and Sub counties, is compliant with the stipulated quality standards and achieves the Department’s objectives including adding value and improving the Government’s operations.
The programme includes periodic internal and external quality assessment and on-going internal monitoring staffing, training and human resource development.
Experienced members of the Internal Audit Department undertake the internal quality reviews of the Audit Units in the Ministries, Departments and Sub counties. The reviews are guided by the principles of objectivity and are conducted by reviewing a range of completed and current audit assignments.
Each Audit Unit is reviewed at least once every three years and is appraised on:
- The quality of audit work.
- The quality of supervision and monitoring.
- Compliance with Departmental Policies and Audit Manual.
- Compliance with the Code of Ethics and the Standards for the Professional Practice of Internal Audit of the Institute of Internal Auditors and other professional guidelines.
- The achievement of stipulated performance standards for:
- Meeting the annual and monthly work plans;
- Performance of field work;
- Issue of reports; and,
- Follow up
While conducting the internal review, the team also looks at the characteristics of internal quality control systems that vary based on the size of the audit unit and the nature of its work. However in general, the internal reviewers will conclude there is reasonable assurance that an internal quality control system is effective if the audit entity has done the following:
- Followed applicable auditing standards.
- Implemented adequate audit policies and procedures.
Once the assessment is completed, a written report is then prepared communicating the results of the quality control review. This report expresses an opinion about the audit unit’s compliance with the standards it follows and has been measured against. The report also contains recommendations for improvement. With this, the government agencies and all other stakeholders are assured that the quality of reports issued meet the set standards and conform to the best practices.
It is worth noting that the internal reviews are at times used in preparation for upcoming external reviews.
The purpose of an external review is to have an independent assessment of the quality of the audit unit’s work. Similar to internal reviews, external reviews focus on assessing the extent the audit function followed applicable standards in conducting its work.
Independent external professionals are engaged to do the external Quality Assurance Review at least once every five years. The review:
- Checks whether the Department is meeting its Mission and Strategic Objectives.
- Checks whether Internal Auditors are fulfilling their mandated roles and responsibilities.
- Identifies and corrects sub-standard practices.
- Checks whether the Internal Auditors are observing:
- The Code of Ethics and the Standards for the Professional Practice of Internal Audit of the Institute of Internal Auditors (IIA Inc);
- Other Professional Guidelines; and;
- Departmental Policies and Audit Manual.