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Comments from the Association of Chartered Certified Accountants

April 2002

ACCA welcomes the opportunity to comment on the proposed "Competency Frame Work for Internal Audit Staff". These comments have been prepared in consultation with members of ACCA's Internal Audit Sub-committee.

We consider that the framework should provide a useful reference point for internal audit staff, although it is not easy to comment on the framework in isolation from the revised Handbook or the details of the proposed Government Internal Audit Certificate.

General

ACCA believes that the proposed framework is a useful extension of annex 4 of the current Internal Audit Training and Development Handbook. We believe, however, that the wording of the framework needs to be amended to ensure it refers to competencies of auditors and not the just the tasks which they should undertake. We also believe that that the framework would be clearer if the column detailing competencies for an auditor was specified (as in the current Handbook) as the competencies expected of an auditor holding the Government Internal Audit Certificate.

Risk control and governance

We feel that it would be helpful to replace the abbreviations PSA/SDA with the full terms.

We believe that the following competencies could be added to the list for Senior Auditor:

• knowledge of appropriate governance arrangements for government organisations
• knowledge and experience of appropriate methods of managing common risks
• wide experience of suitable controls to manage risks in a variety of relevant environments.

We also believe that the final bullet point under Head of Internal Audit should be extended to include "and reviews of corporate governance arrangements".

Audit Strategy

ACCA believes that the competencies for the Auditor under this heading are too onerous. We consider that the following two competencies should be moved to the Senior Auditor column:

• drafts audit plans including details of time and costs
• understands the priority of specific assignments within the audit strategy.

We believe that the following competencies should be restricted with the addition of the wording indicated below:

• is aware of and understands the main aspects of the long-term audit strategy
• can define audit objectives for agreement with senior audit staff
  and
• can produce the scope for an individual audit assignment for review by senior audit staff.

We also believe that the fourth bullet point under Auditor could be worded more carefully to ensure that it is clear that this includes the ability to manage their own time on individual audit assignments, in total and also over the various stages of the audit.

We believe that the competencies for the Senior Auditor should be extended by including the two from the Auditor column detailed above and by adding the following competency:

• uses experience from various audit assignments to suggest refinements to audit plans and strategy.

We consider that the first competency under the Head of Internal Audit should be amended to indicate that they should have the experience to develop an internal audit strategy for agreement with the accounting officer. We also believe that the following competency should be moved to the next section, on Management of Audits:

• establishes quality control procedures to ensure audit work is carried out to an acceptable standard.

Management of audits

We consider that the first competency under Auditor should be amended to ensure that this includes the ability to manage their own time budgets and to allocate their time over the various aspects of an audit assignment in an appropriate manner (care should be taken to ensure that the same competency does not occur here and under the previous heading).

We also consider the following competency would be more appropriate under the next section on Audit reporting:

• maintains appropriate documentary records for each audit assignment.

We believe that the following competencies should be added to those detailed in this section for senior auditors:

• has the ability to identify training and development needs for audit staff and agrees appropriate plans with the Head of Internal Audit
• has the ability to ensure that assignment budgets are adequately managed, individually and in total and can ensure that junior staff adhere to their budgets, use their time appropriately and complete audit assignments by the target dates.

We believe that the first bullet point under Senior Auditor should be restricted by adding the words "individual audit assignments" at the end of the competency.

We consider that the following two competencies should be added to those included in this section for the Head of Internal Audit:

• can manage the overall professional development of the audit unit's staff
• where appropriate, is able to effectively agree action plans etc with senior staff from the organisation or the accounting officer.

Audit reporting

We believe that the first competency for the Auditor should be extended by including the words "with the need for a minimum of editorial changes" at the end. We also believe that the following competency should be added to this section:

• develops an appropriate style of writing for audit reports.

We consider that the following competencies should be re-ordered as shown:

• decides the format and type of reporting medium most appropriate for the assignment
• reviews audit findings and recommendations
• audit opinion is based upon appropriate audit evidence
• signs off audit reports
• provides information and analysis contributing to the annual audit opinion.

We also believe that the following competency should be added to those included for the Senior Auditor:

• is able to assist auditors to develop appropriate means and styles of communication.

We believe that the following competency should be added to those included for the Head of Internal Audit:

• can ensure that critical findings, and those of a more general nature, are promptly reported to senior staff and/or the accounting officer, as appropriate.

Communication

We consider that the following competency for the Auditor would be more appropriate if included in the previous section on audit reporting:

• completes appropriate audit working papers documentation to ensure complete record is maintained.

Government Environment

We consider that the following competencies for the Auditor would be more appropriate if they were included for the Senior Auditor:

• understands the impact on departmental business of significant legislation e.g. DP Act; FOI Act and HR legislation
• understand the role of the European Union and the relationship with Government
• understands the role of NAO and the PAC in terms of Government accountability and regularity and propriety
• understand the impact of business decisions on Spending Reviews/ Budgets and Resource Accounting
• understands the principles of the Private Finance Initiative (PFI); Public Private Partnerships (PPP) and EU Finance (if appropriate)
• understands the impact of Turnbull, Sharman etc on Corporate Governance issues in the public sector
  and
• understands the principles of the Civil Service Reform Programme.

We hope that you find these comments a useful aid to further improving the proposed competency framework.

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