By Tarunkumar Singhal, Raman Jokhakar, Chartered Accountants
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An international peer review of the CAG has appreciated its audit framework as “conceptually sound” while noting that stakeholders, including government departments, appreciate its reports as “valuable information”.
The CAG requested an international peer review in August 2011, less than a year after it submitted the 2G scam audit. The peer review team was led by the Australian National Audit Office and included representatives from audit bodies of Canada, Denmark, the Netherlands and the US.
“The objective of the peer review was to assess the extent to which the performance audit function of the Supreme Audit Institution (SAI) India adheres to applicable standards of professional practice; and to identify opportunities for improvement,” the report said.
“During the peer review, we met with a range of SAI India’s stakeholders, including the PAC and COPU (Committee on Public Undertakings) members, and senior government officials. They advised that SAI India’s performance audits provide valuable information, often not otherwise available, on the performance and on-the ground impact of government programs and funding. Stakeholders also provided positive feedback on the quality of recent performance audit reports,” the report said.
The peer review team also recorded that the CAG’s Audit Quality Management Framework (AQMF) “is conceptually sound”, but there was a “need to strengthen the AQMF to increase the level of assurance provided to the CAG that these auditing requirements are consistently being met”. The review covered 35 performance audits from April 2010 to March 2011 that covered the period when the 2G audit was also submitted.
The peer group found that there was “variability” in CAG’s adherence to applicable standards of professional practice across the performance audit function. “Individual audit guidelines, which outline the plan for each audit, were developed for all but one of the performance audits in the peer review sample,” it said. The CAG “also interacted with the audited entities in accordance with accepted conventions, including seeking to conduct entry and exit conferences and providing a draft audit report to the audited entity for comment. The peer group said areas where CAG could improve in “the application of reporting standards” to make them more “balanced, fair, persuasive, and satisfy audit objectives.” It also said that there was scope in about half of the considered reports to be more balanced in content and tone.
