Senior Auditor TURKISH COURT OF ACCOUNTS Sep. 2018, Istanbul - - PowerPoint PPT Presentation

CHANGING ENVIRONMENT OF PUBLIC SECTOR COMPANIES, AND BENEFITS OF INTERNAL CONTROL AND AUDIT PROCESS Serif OZKAN Senior Auditor TURKISH COURT OF ACCOUNTS

• Sep. 2018, Istanbul

AGENDA

• I. Constant Change in Companies
• II. Managing Change
• III. Benefits of Internal Control and Audit Process
• IV. Opinions

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• I. Constant Change in Companies
• Change and external environment
• The macro environment
• The micro environment

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• II. Managing change
• The Internal Dimension
• Implementation of change - hard and soft approaches
• Managing for Successful Change

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Basic Questions of Internal Control

Objectives •What are we trying to achieve? Risks

• What might thwart our efforts?

Controls

• How can we manage risk?

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• III. Essential Components of Internal Control

Control Environment Risk Assessment Information and Communication Monitoring Control Activities

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Risk Mapping

Consider the organization’s risk tolerance and risk appetite related to the risk response

IV III 1 II 2 I A B C D E F

Impact (I)

Impact: I – Marginal; II – Material; III – Severe; IV – Catastrophic Likelihood: A – Almost Impossible ; B – Remote; C – Low; D – Reasonably possible; E – Probable; F – Very High

Likelihood (L)

LOW MODERATE HIGH

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Risk Strategies

Avoidance Do not proceed! Mitigation Improve controls to reduce likelihood/impact Transfer Shift responsibility to an external party Acceptance Accept the risk! Creation Seek risk activities strategically to maximize

• pportunities

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Understanding Control Design

• Good Controls are:
• Focused
• Integrated
• Accurate
• Simple
• Accepted
• Cost Effective

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• IV. Opinions
• Change is inevitable. Change is constant.
• Obligations of Internal Control .
• Duties for Internal Audit Departments and SAI’s

Change

Internal Control Supreme Audit Institutions Internal Audit

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RESOURCES

• Akyel, R. & Erkan, B. (2012). Achieving Success in Assimilation and Implementation of the ISSAIs (Full text). Journal of Çukurova University Institute of Social Sciences,
• Akyel, R. (2010). Today's Understanding of Internal Control and Its Reflection on Turkey. TODAİE's Review of Public Administration,
• COSO Executive Summary on updated Internal Control Integrated Framework: http://coso.org/documents/990025P_Executive_Summary_final_may20_e.pdf
• Caldeira, Vitor (2012), Enhancing Stakeholder Confidence: Auditing Management Integrity, Accountability and ‘Tone at the Top', VII. EUROSAI-OLACEFS Conference, Tbilisi.
• Croft, Liz (2000), Management and Organization in Financial Services: Institute of Financial Services, Financial World PublishingCanterbury, Kent, England.
• Görgün, Emin (2011), Türk Kamu Mali Yönetiminde Sayıştay Denetimi [TCA Audit in the Turkish Public Financial Management], Karamanoğlu Mehmetbey Üniversitesi Sosyal Bilimler Enstitüsü, Karaman.
• IFAC (2007), Transnational Auditors Committee, “Tone at the Top and Audit Quality”, International Federation of Accountants.
• INTOSAI (2007), International Standards for Supreme Audit Institutions ISSAI 40, Mexico Declaration on SAI Indepence.
• INTOSAI (2010), Capacity Building Committee, “How to Increase The Use and Impact of Audit Reports: A Guide for Supreme Audit Institutions”.
• INTOSAI Guidance for Good Governance, Internal Control: Providing a Foundation for Accountability in Government.
• INTOSAI (2010), International Standards for Supreme Audit Institutions ISSAI 20, Principles of Transparency and Accountability.
• INTOSAI (2010), International Standards for Supreme Audit Institutions ISSAI 40, Quality Control for SAIs.
• INTOSAI Guidance for Good Governance, Internal Control: Providing a Foundation for Accountability in Government.
• ISSAI 40, Quality Control of SAIs, www.issai,org.
• ISSAI 100, Basic Principles in Government Auditing, www.issai.org.
• The Institute of Internal Auditors (2006), The role of Auditing in Public Sector Governance: Professional Guidance.
• The University of North Carolina at Charlotte, Internal Control Training Documents

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End of Presentation

Thank You!

serif.ozkan@sayistay.gov.tr

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