Enhancing public confidence: the GAO's peer review experience: even auditors need to be audited.In 2004 we at the Government Accountability Office The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress, and thus an agency in the Legislative Branch of the United States Government. (GAO) arranged to have a multinational team of experienced performance auditors conduct the first-ever peer review of our performance audits of federal government programs (www.gao. gov/peerreviewrpt2005.pdf). We also hired KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen LLP LLP - Lower Layer Protocol to conduct a peer review of our financial audit practice their fourth such engagement with us. Both audit teams concluded that during the period reviewed the GAO's quality assurance system was suitably designed and operating effectively to provide reasonable assurance of conforming to applicable professional standards. The international peer review team also said that other national audit offices may want to emulate several of our practices and made suggestions that further enhanced our practice and provided other significant benefits. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the reviewers, "[the] quality assurance system reinforces the GAO's independence, objectivity and reliability." These reviews inform Congress of and give the American people An American people may be:
UNDER THE MICROSCOPE A team of 16 experienced performance auditors from seven countries reviewed our performance audit practice. The Office of the Auditor General of Canada The role of the Auditor General of Canada is to aid accountability by conducting independent audits of federal government operations. The Auditor General reports to the House of Commons, not to the government. led the multinational team. Other participants included national audit offices in Australia, Mexico, the Netherlands, Norway, South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. and Sweden. The KPMG team consisted of experienced financial audit partners and managers with extensive government financial auditing experience. The review teams focused on the elements of our quality assurance system dealing with engagement performance and compliance monitoring. They reviewed our audit policies and process controls, examined a representative sample of our 2004 audit engagement files and reports on government programs, and interviewed senior managers and staff responsible for selected engagements. They also evaluated our internal inspection program, including a representative sample of engagement files that our internal inspectors had examined in 2004 to determine whether their findings were supportable. The performance audit team followed government auditing standards (the Yellow Book) and conducted the review in a manner consistent with the code of ethics Code of Ethics can refer to:
The review team's ultimate objective was to determine whether the GAO's system of quality controls provided reasonable assurance that our work is independent, objective and reliable. The financial audit team followed the applicable AICPA AICPA See American Institute of Certified Public Accountants (AICPA). peer review standards as well as government auditing standards. GOOD MARKS A key organizational and operational benefit of the peer review was the reviewers' confirmation that some of our key overarching o·ver·arch·ing adj. 1. Forming an arch overhead or above: overarching branches. 2. Extending over or throughout: "I am not sure whether the missing ingredient . . . quality control procedures are global better practices (see "How to Do It Better,"). According to their report, those practices help ensure that we focus our efforts on factors that affect government performance, that we assign engagement resources according to risk, that we develop complete and reliable evidence, that our engagement teams have the guidance and diagnostic tools necessary to perform their work and that our reports are clear, persuasive and fair. The reviewers also said that the GAO could improve its performance audit practice by, for example, enhancing the transparency and efficiency of its quality assurance system and policies. We have implemented some of these recommendations, and we are testing others (see "Dividends Earned,"). A PLAN FOR EXCELLENCE The GAO's approach to quality assurance was based on applicable professional standards and the agency's core values of accountability, reliability and integrity and it ends with public dissemination of virtually all its products. We had already created a quality assurance framework (see the exhibit) to summarize the policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental we use to ensure compliance with professional standards and our core values. It applies to both performance and financial audits. The framework focuses on staff, processes and technology It addresses leadership, human capital, engagement performance, monitoring and policy review by defining the roles and responsibilities of key participants, key control objectives and relevant procedures, and by providing links to online references. At the framework's core is a standardized standardized pertaining to data that have been submitted to standardization procedures. standardized morbidity rate see morbidity rate. standardized mortality rate see mortality rate. , decision-based engagement management process that ensures consistency in the application of key controls. The framework also includes monitoring and assessment by both internal and external entities, and mechanisms for continuous improvement. [ILLUSTRATION OMITTED] THE KEY TO QUALITY CONTROL The GAO has long had a rigorous internal quality control program that annually reviewed a sample of work from every part of the agency for compliance with policies and procedures. These reviews evolved into our current inspection program, which the peer reviewers recognized as a comprehensive, effective assessment. The development of this rigorous inspection program took several years, but its results have helped enhance training, reform policies and improve audit tools. We also had improved our methodology for conducting the inspection by designing checklists and other tools to facilitate it and had developed a staff with the expertise to conduct inspections. IDEAS FOR IMPROVEMENT The peer reviewers also made the following suggestions: * Distinguish between audit and non-audit services. Provide additional guidance on what kind and extent of evidence is appropriate for each form of service, and explain when it is appropriate to consider changing an audit determination in view of newly obtained evidence. * Provide additional details on the sources of critical audit-related information and the implications of choosing a particular audit scope and methodology. * Review the quality assurance system to see whether we can improve it. * Streamline the audit documentation requirements. * Increase the efficiency of the inspection program. IT WORKS FOR US Although peer review is a lengthy and costly process, it enables us to better inform stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. of our activities and their results. For example, in accordance with government auditing standards we share the peer review reports with our oversight committee. We also make them available to the public on our Web site (www.gao. gov/aac.html) and refer to them in our annual performance and accountability report and testimony to Congress. In addition to promoting the public interest, peer review helps an audit organization understand whether its practices comply with professional standards and how they compare with those of other entities and with new practices. For us, the chief benefit was confirmation of our compliance with government auditing standards. As an organization in constant pursuit of improvement, we also benefited from the peer reviewers' recognition of our quality control procedures as global better practices as well as their suggestions on how to strengthen guidance and streamline procedures. These positive results have more than repaid the time, money and effort we've put into peer review. AICPA RESOURCES CPE (Customer Premises Equipment) Communications equipment that resides on the customer's premises. CPE - Customer Premises Equipment "Peer Review: Are You Ready?" (text, # 731692JA). JofA Article "Peer Review Is Stronger and Better Now," JofA, Apr.05, page 44, www.aicpa.org/ pubs/jofa/apr2005/jentho.htm. Online Center Center for Public Company Audit Firms Peer Review Program, www.aicpa.org/ centerprp/peer_review.htm. Publication AICPA Peer Review Program Manual (loose-leaf subscription, # QR-XXJA). For more information or to place an order, go to www.cpa2biz biz n. Informal Business. biz Noun Informal business Noun 1. .com or call 888-777-7077. RELATED ARTICLE: How to do it better. The peer reviewers identified the following as GAG gag - Equivalent to choke, but connotes more disgust. "Hey, this is Fortran code. No wonder the C compiler gagged." See also barf. better practices: * Use strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. to focus on and respond to significant issues and management challenges. * Conduct audit risk assessments to identify risk levels and determine the appropriate level of product review and management involvement. * Establish agency protocols (see www.gao.gov) that explain what agencies can expect from the GAG during the audit and what the GAG expects from them. * Use experts to conduct innovative analysis of complex situations. * Employ the Electronic Assistance Guide for Leading Engagements (EAGLE) that helps GAG staff better manage their engagements by giving them immediate access to the policy, procedural and documentation requirements of the quality assurance system. * Tailor audit report designs to the needs of readers with varied interests. RELATED ARTICLE: Origin and mission. The GAO is part of the legislative branch of the federal government and thus is independent of the executive branch. Congress established the GAO in 1921 to investigate all matters relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the receipt, disbursement DISBURSEMENT. Literally, to take money out of a purse. Figuratively, to pay out money; to expend money; and sometimes it signifies to advance money. 2. and application of public funds See Fund, 3. See also: Public . Since then, Congress has expanded the GAO's statutory authorities and frequently calls upon it to thoroughly examine federal programs and their performance, conduct financial and management audits, perform policy analysis, provide legal opinions, adjudicate adjudicate (  jōō´dikāt´),v bid protests and conduct investigations. In 2004 the GAO began work on nearly 800 performance audit engagements and issued more than 1,000 audit products. In fiscal year 2005, the GAG produced an $83 return on each dollar invested in our agency. RELATED ARTICLE: Dividends earned. The GAO's peer review * Provides assurance to Congress and to the American people that the GAO's work is objective, independent and reliable. * Helps the GAO meet government auditing standards. * Provides assurance to the Comptroller General Noun 1. Comptroller General - a United States federal official who supervises expenditures and settles claims against the government functionary, official - a worker who holds or is invested with an office and to senior GAO executives that the GAO is fulfilling its responsibilities and complying with requirements. * Demonstrates that the GAO itself is accountable. * Documents the GAO's Quality Assurance Framework. * Enables the GAO's staff to learn from others. * Is a source of pride for GAO staff. * Improves policies, forms, guidance and training. * Increases the staff's knowledge of standards, policies, guidance and better practices. * Enhances the GAO'S quality control system. by The Honorable David M. Walker David M. Walker can refer to:
David M. Walker, CPA, is comptroller general of the United States and heads the U.S. Government Accountability Office. |
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