How to prepare for an audit by the National Audit Office

By conducting audits, the NAOF ensures that state funds are efficiently and appropriately used. The audits also assist the audited entities in developing their operations funded with state funds. Audits by the NAOF are conducted in compliance with audit guidelines that are based on the international ISSAI auditing standards. The audits provide information for Parliament and senior government officials.

Good to know about NAOF audits

The content, scope and duration of our audits depend on the audit type. Financial audits of government accounting offices are made annually, while the subject matters of performance, compliance and fiscal policy audits vary a great deal.

The audits’ thematic priorities are mainly based on the National Audit Office’s own strategy. We select topical, important themes and make decisions on the preliminary review topics and entities to be audited on the basis of these themes. When selecting the audit topics, we always consider the impact on central government finances.

The audit will not come as a surprise to your organisation. Instead, we want to work in close cooperation with your representatives from the very beginning. The opinions and recommendations  in the audit are based on evidence collected. That is why you should provide us with the required information and assist us in the audit if necessary.

You can always contact our auditor at any stage of the audit. Your organisation is also entitled to receive information on the progress of the audit.

Audit stages

The information given in the figure is disclosed in the text.

 

Image:  Audit stages.

Starting the audit

The audit will start with planning at the NAOF at the project plan stage, during which we will also contact your experts to discuss the audit. The above-mentioned preliminary review stage is important especially in the case of a performance audit where the audit topics are not recurring.

In many cases, our auditor will contact your organisation already at the preliminary review stage to decide whether an audit will be performed. The NAOF will make a decision to go ahead with the audit in most cases, but sometimes the preliminary review stage reveals that performing an audit is not appropriate due to a recent major organisational change or bad timing, for example.

If an audit will be performed, the auditor will determine the audit design and more specific audit criteria. Cooperation between you and the NAOF auditor is of utmost importance at this stage for the NAOF to perform a useful audit that will develop your operations.

Your organisation will be given an opportunity to comment on the draft preliminary review report to ensure that the auditor has correctly understood how your organisation works. This will eliminate misunderstandings.

Audit stage

At the beginning of the audit, the NAOF may send an invitation to a kick-off meeting where the nature of the audit process, the data collection process and the schedule will be discussed with representatives from your organisation.

The required documents and information for the audit will be requested from your organisation. An agreement on other meetings may also be made to give the auditor an opportunity to familiarise themselves with the organisation and discuss the themes with you. In many cases, you will receive an agenda including the issues to be discussed at these meetings in advance. The discussions may be recorded for further analysis in case of a performance audit, for example.

When the audit is almost complete, you will receive a draft report for comments: you will always be given the opportunity to offer your opinions on the content of the draft report. Your comments on the draft report will be documented and considered in the final audit report at the discretion of the NAOF. In addition, your opinions will be published on the NAOF’s public website.

Audit report

Duration of the audit stage varies depending on the audit. The audit may take up to several months. When the audit is complete, the National Audit Office will publish an audit report to Parliament that includes the opinions and recommendations of the NAOF. The report will also be submitted for information to the Ministry in the administrative sector of which the audited office is included. In addition, the report will be published on the NAOF’s website. 

We generate information primarily for Parliament. We publish an annual financial audit report outlining all the financial audits completed over the course of the year and a brief annual summary. Our audit-specific intermediate reports include audit conclusions, justification for them and recommendations.

We always aim to offer recommendations that allow you to make decisions on the appropriate actions. At the end of the audit process, we will request feedback from your organisation on the audit process to develop our operations.

After the audit

Depending on the audit type, the NAOF may perform a follow-up a couple of years after the audit. The NAOF will usually send you a letter requesting a report on implementation of the recommendations given. A follow-up is always performed in order to monitor changes in the audited entity, and a public follow-up report will be prepared.

Good governance and cooperation

The NAOF aims to support sustainable development of public entities. Its audits are based on the international ISSAI auditing standards. To achieve this goal, the NAOF provides up-to-date information on the use of state funds, mainly for Parliament to use. It also provides information for the development of the operations of its other stakeholders, such as ministries and government offices. Good internal control and risk management will ensure that the general public trusts the central government.

Interaction, discussions and preventive actions are the key in this work. The NAOF aims at good cooperation by offering the opportunity to discuss the audit as it proceeds.