The Professionalisation Agenda for INTOSAI

164 Pages·2016·2.09 MB·English

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Theme Paper 
Theme II:
The Professionalisation Agenda for INTOSAI
What can promote INTOSAI's credibility to become a
more prominent international organization?
Theme Chair
SAI New Zealand
December 2016
Contents
1. Introduction ...................................................................................................................... 3 
2. Defining professionalisation ............................................................................................. 4 
3. Context for professionalisation ......................................................................................... 6 
4. Strategic and current challenges for public sector auditing ............................................... 8 
5. The global agenda: INTOSAI as a respected voice and standard setter ........................ 10 
6. The regional agenda: regional organisations adding value to member SAIs .................. 17 
7. The SAI agenda: professional SAIs making a difference for citizens .............................. 23 
8. Public sector auditors - globally respected professionals ............................................... 33 
Questions for discussion .................................................................................................................... 36 
Glossary of terms ............................................................................................................................... 37 
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1. Introduction
1.1. The purpose of this theme paper is to outline a proposed “professionalisation agenda” for the
INTOSAI community to discuss at INCOSAI XXII.
1.2. The proposed professionalisation agenda has been drawn from several sources, including:
 The theme information paper, what can promote INTOSAI’s credibility to become a
more prominent international organisation? (January 2016).
 The survey of SAIs, carried out by the SAI of the United Arab Emirates as host of
INCOSAI XXII.
 The regional papers, prepared in response to the theme information paper on
professionalisation.
 Other INTOSAI developments over the period of preparation for this INCOSAI, including
the INTOSAI draft strategic plan 2017-22 and the proposed changes to the INTOSAI
statutes, proposals for a global auditor certification programme and competency
framework, the establishment of the Forum for INTOSAI Professional Pronouncements
(FIPP), the revised framework for regional professionalism and the SAI Performance
Measurement Framework (PMF) strategy 2017-2019.
1.3. The regional papers were a useful way to widen debate and synthesise discussions. Thank
you to all SAIs and regional organisations for the valuable contributions.
1.4. This theme paper sets out a definition of professionalisation within the context and
challenges for the INTOSAI community. The paper discusses the professionalisation agenda
at four levels and explores the relationships between them. These levels are:
 global;
 regional;
 SAI; and
 auditors.
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2. Defining professionalisation
2.1. In the theme II information paper, we defined professionalisation as the ongoing process of
gaining authoritative expert and ethical qualities and status, and demonstrating a high level
of competence or skill. It means increasingly being, and being seen to be, professional,
doing the right work at the right time as effectively and efficiently as possible.
2.2. Alan Bullock & Stephen Trombley (1999) in The New Fontana Dictionary of Modern Thought
argue that a profession arises when any trade or occupation transforms itself through "the
development of formal qualifications based upon education, apprenticeship, and
examinations, the emergence of regulatory bodies with powers to admit and discipline
members, and some degree of monopoly rights."
2.3. R.W. Perks (1993) in Accounting and Society identifies major milestones that may mark an
occupation being identified as a profession:
 an occupation becomes a full-time occupation;
 the establishment of training and/or university programmes;
 the establishment of representative associations;
 the introduction of codes of professional ethics;
 the establishment of licensing laws.
2.4. Regional papers consistently noted that a fundamental principle for professionalisation in the
INTOSAI community is that the responsibilities, autonomy and operating environment of
each SAI should be respected. In essence INTOSAI and regional organisations exist to
support SAIs and their staff to be more effective. This should contribute to SDG 16: “Promote
peaceful and inclusive societies for sustainable development, provide access to justice for all
and build effective, accountable and inclusive institutions at all levels.”
2.5. While SAIs and regional organisations are at different stages of development and maturity,
all are moving toward a common goal of strengthening professionalisation. For the purpose
of this paper we will use the overall definition of professionalisation in the INTOSAI
community as:
The ongoing process of gaining high levels of independence, expertise, competence,
ethical behaviour and quality, underpinned by professional standards.
Some of the processes that support the definition are:
 The development of individual auditors’ technical skills and ethical competencies.
 The continuous improvement of each SAI’s systems, processes and structures, in
response to the needs and challenges of changing environments.
 The creation of an international and regional environment where professional attitudes
and skills are encouraged, developed and supported by a framework of institutions,
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systems and laws to enhance the standing and quality of public sector auditing.
 Good governance of the public sector, including of other agencies in each jurisdiction’s
public financial management framework.
2.6. The ultimate purpose of INTOSAI’s professionalisation agenda is to support SAIs and their
staff to make a difference to the lives of their citizens. This is shown in the following diagram.

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3. Context for professionalisation
3.1. Anthony Hopwood, who pioneered what has come to be known as “behavioural accounting”,
argued that understanding accounting properly requires analysis of the contexts in which it
takes place. The accounting and auditing professions are shaped by many contexts,
including human dynamics, competing priorities and principles, political pressures,
technology and the endless and exciting developments around us. Hopwood’s observation
that accounting and auditing are performed by people and for people is clearly demonstrated
in the professionalisation regional papers.
3.2. These papers show that country-specific factors significantly impact a SAI’s ability to achieve
higher levels of professionalism. A SAI’s level of professionalism can vary depending on
factors including location; staff professional affiliations; the level of development within the
country and wider region; the country’s political and institutional settings and cultural norms;
the availability of structured education programmes; the country‘s financial stability;
competition from private sector audit firms; and the existence of institutions that offer
certification. For instance:
 African Organization of Supreme Audit Institutions (AFROSAI) has different sub-
regional organisations and SAI models. Its members are divided into three sub-regions
or linguistic sub-groups consisting of Arabic, English and French speaking African SAIs.
AFROSAI members operate according the Westminster, Napoleonic (Judicial) or
General Inspectorate Models. With the African continent facing huge governance and
public financial management challenges, the onus is being put on all its members to
strengthen government accountability.
 Arab Organization of Supreme Audit Institutions (ARABOSAI) also has different sub-
regional organisations and SAI models within its community. Across its members are
wide variations in the level of professionalisation and resources available to execute
mandates. For some, there are incompatibilities between their organisational and
jurisdictions’ legal frameworks, and international standards and the direction of best
practice.
 Asian Organization of Supreme Audit Institutions (ASOSAI) has a widely diverse
membership made up of different languages, cultures and religions. Member SAIs are
all at different stages of development and under different circumstances in terms of
public sector auditing. Within this context, ASOSAI’s members know that SAI capacity-
building activities are necessary to enhance credibility and provide quality audits in their
respective countries. ASOSAI makes strenuous efforts to share knowledge and
experiences, and design capacity development programmes to satisfy common needs
and interests.
 Caribbean Organization of Supreme Audit Institutions (CAROSAI) is mainly comprised
of small island states. As such, its human resources – particularly those with
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professional qualifications – are limited. During the past five years, many of the heads
of SAI with institutional knowledge have retired, and CAROSAI members face
challenges to ensure that the knowledge and gains achieved to date are not lost.
 European Organization of Supreme Audit Institutions (EUROSAI) is a very diverse
region with a large variety in terms of models, audit approaches, needs and languages.
In general, its members are independent in all core dimensions. Members are in a
position to fulfil their mandates and therefore need less focus on building regional
capability and capacity. However, EUROSAI emphasises that SAI independence is a
”permanent tension” that exists not so much as structural arrangements but as it is lived
in practice.
 The members of the Organisation of Latin American and Caribbean Supreme Audit
Institutions (OLACEFS) operate on European-drawn audit models of comptroller office,
court of accounts or audit chamber. They have a combination of elements and features
of these different control models. Despite these institutional differences, they face
common challenges around improving citizen participation in public policy and reducing
poverty, social discrimination and corruption.
 Pacific Association of Supreme Audit Institutions (PASAI) members include some of the
smallest and most remote nations on earth. For these SAIs, sustaining public auditing
improvements is difficult because auditing in tight-knit social and cultural environments
involves significant pressures. However, this close-knit nature also enables PASAI
members to draw heavily on support from each other and their regional organisation for
their professionalisation efforts.
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4. Strategic and current challenges for public sector auditing
4.1. Alongside these contextual regional factors are a range of ongoing strategic and current
challenges that are likely to affect INTOSAI’s professionalisation agenda.
4.2. EUROSAI’s paper outlines strategic challenges facing their member SAIs, including:
 Being responsive to changing environments and emerging risks (principle 5, ISSAI 12),
as well as independence challenges resulting from new developments in SAIs’
operating environments (principle 1, ISSAI 12).
 Communicating effectively with stakeholders (principle 6, ISSAI 12) during the audit
process, when publishing audit results online and reporting findings via media and
social media are common approaches in EUROSAI member SAIs and continue to be
actively developed.
 Complying with ethical requirements (principle 10, ISSAI 12), including managing
integrity matters related to staff and auditors (such as conflicts of interest and sensitive
expenditure) on an ongoing basis.
 Ensuring that the scope of each SAI’s mandate is observed in carrying out and reporting
audit work.
4.3. Further to these ongoing strategic challenges, many SAIs face a range of common forces
and emerging areas of risk in their operating environments, including:
 The need to audit central and other banks, the management by governments of financial
crises and sustainable development.
 The adoption of new accounting standards by public sector entities.
 Contributing to the prevention of corruption by promoting and auditing ethical conduct in
public organisations.
 The increasing use by public sectors of information technology to deal with huge
amounts of information, and the contribution of SAIs to the quality, use and promotion of
open data.
 The importance of building capacity in the areas of communication strategies, new
media and online social networks, and adapting working processes to these new means
of open communication.
4.4. Given the scale of each of these challenges, and their interdependent effect on the work of
SAIs, many of these challenges are reflected in INTOSAI’s five cross-cutting strategic
priorities for 2017-20221.
4.5. The focus of this paper is on two of INTOSAI’s five strategic priorities namely:
1 INTOSAI draft strategic plan 2017-2022
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 Strategic Priority 3: Effective coordination among standards-setting, capacity
development, and knowledge sharing to support SAIs and improve their performance.
 Strategic Priority 5: Building upon, leveraging, and facilitating co-operation and
professionalism among the regional organisations of INTOSAI.
4.6. The remainder of this paper is structured on the four levels of the global agenda, the regional
agenda, the SAI agenda and our auditors.

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5. The global agenda: INTOSAI as a respected voice and standard
setter
5.1. INTOSAI is a global organisation built on strong traditions of collaboration and support, which
is aptly expressed in its motto “Mutual experience benefits all”. Through its advocacy of and
support to SAIs and, more recently, its standard setting activities, INTOSAI is building
respect in the international community.
5.2. This section discusses INTOSAI’s:
 Role as an increasingly respected global voice and advocate.
 Work in setting global public auditing standards and supporting regional and SAI
professionalisation, including the INTOSAI Development Initiative (IDI) and the proposal
to develop competency-based auditor certification processes.
 Governance improvements.
Advocacy and influence
5.3. INTOSAI continues to be a strong global advocate for member SAIs to have an appropriate
independent mandate, so that SAIs can effectively discharge their roles and make a
meaningful contribution within their respective jurisdictions. SAIs are very supportive of
INTOSAI’s advocacy efforts. In the survey of SAIs, 71 percent of respondents said that
INTOSAI does, at minimum, a very good job advocating on their behalf.
5.4. The importance (and success) of this advocacy work was well articulated by INTOSAI’s
former Secretary-General, Dr Moser:
The great importance of the core considerations of INTOSAI, namely the
strengthening of independence, capacity building, as well as the safeguarding of
accountability and the sustainable development of public finances, is not only
underlined by the fact that more than 40% of INTOSAI member SAIs still had to
fight against limitations of their independence in 2014, but also by the increased
interest of the United Nations in the work of INTOSAI.2
5.5. As well as the United Nations, there are other key stakeholders with a keen interest in seeing
INTOSAI as a credible and influential global organisation acting in the public interest. These
include:
 donor agencies, such as the World Bank, Asian Development Bank and Inter-American
Development Bank;
 the International Federation of Accountants and its regional organisations and local
member bodies; and
 the Institute of Internal Auditors.

2 Letter dated January 2015 from Dr Josef Moser, Secretary General of INTOSAI as president of the Austrian Court of Audit.
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