This element of AQMS of client and stakeholder relations along with its sub-elements is explained in the following flow diagram:
The sub-elements are discussed in subsequent sections.
5.1 The usefulness and effectiveness of audit work is truly enhanced, among other things, through the clarity and understandability of the manner it is communicated. This is an important requirement of any audit report as well as other audit messages generated by the auditor for the client, stakeholders, and the public. Auditors should prepare audit reports communicating the results of each audit. The form of the audit report should be appropriate for its intended use. The audit reports make the results less susceptible to misunderstanding and are available for public inspection in order to maintain transparency and public accountability for government programmes.
5.2 SAI may use a wide variety of ways to communicate its message to help convey the findings and conclusions of the audit reports. These should be ranging from communicating initial audit memorandums and management letters to audit reports sent to the government and finally presented to legislature. Once the reports are approved and become public document they are eligible for wider dissemination. SAI may also use oral briefings to communicate the salient features of the reports after they become public document. In addition, SAI may make available the reports through internet to be accessible for all. (Adapted from the practices in SAI India & Philippines)
5.3 After the reports are placed in the legislature/submitted to the stakeholders, SAI may hold seminars, conferences and interviews with media and through written articles deliberate and discuss audit policy formulation and implementation. This brings the audit policy, policy interpretation and policy expectation to the attention of audit clients and stakeholders.
5.4 A qualitative analysis of the media coverage should be undertaken that the audit messages are well understood and reported accurately. In particular, the SAI should be considered a credible and reliable source of information by the media and the public.
5.5 In order to ensure that the content of the audit reports is well communicated, a concerted effort should be made to promote the use of plain language in the audit reports. The SAI should organize training programmes for auditors in the use of plain language skills and for further enhancing their communication skills. Regular feedbacks from the media and the public about the clarity of the audit reports would indicate that the SAI is on the right track. (Performance Report of OAG, Canada, 2002)
5.6 The SAI management needs to develop a system whereby the clients’ and stakeholders’ satisfaction to the work performed by the SAI could be assessed. The legislature, the government departments, government companies and corporations and other audited entities should perceive the audits and other studies as relevant.
5.7 Legislature being the primary client of the SAI, one way of assessing the client’s satisfaction is to carry out an extensive survey of parliamentarians to find out how they perceive and gauge SAI’s performance. In the survey, legislators may be requested if they consider the SAI’s regular examination and audit of public accounts or financial statements to be important and whether it has led to increase in the public confidence in the government finances. The interviews of members of the Public Accounts Committee should be conducted by an outside expert to ensure independence of results. The SAI should analyse the content of the reports of the PAC on the SAI’s reports in order to measure the extent of endorsement of SAI’s recommendations. One effective way of assessing the usefulness of the SAI’s work and the quality of its audit process is to see whether PAC’s recommendations closely parallel audit recommendations.
5.8 One of the questions that may be covered in the survey is to find out whether audit reports are used as source material for speeches, press releases or letters to ministers and constituents and whether the parliamentarians also used them as background for Parliamentary debates and questions and to assist in answering questions from constituents.
5.9 One indicator of the effectiveness of audit work is that increased number of audit studies is taken up by the legislative committees for examination. SAI should have increased and more effective liaison with these Committees to ensure that governance centric topics and subjects of immense public importance on which SAI has reported are increasingly taken up.
5.10 Engaging stakeholders and involving them in the audit process should be an important aspect of SAI’s work. A similar survey of senior government officials of ministries and governments and senior management of government companies and corporations should be conducted to examine the level of stakeholder interest by asking them if they agreed that information provided by the audit assisted the government functionaries, management and the audit committees in the companies with their governance responsibilities. They should also be asked if they perceive the information provided by audit and the audit process as useful.
5.11 Recommendations are intended to address the underlying causes of problems or weaknesses in internal controls, failures to comply with laws and regulations, or other matters impeding effective and efficient performance. An indication of the usefulness of the audit work and the underlying audit processes is whether the majority of the recommendations have been implemented by the audited entities. SAI should maintain a database of recommendations. Periodically, the audited entities should be requested to send their responses on the recommendations, which should be reviewed for plausibility by the audit teams.
5.12 SAI may have an in-built mechanism of following up each previous performance audit with a view to assessing the impact of audit on the audited entities and whether they perceive the audit as useful. (Performance Report of OAG, Canada, 2002).
5.13 The survey to be conducted by the SAI should cover the annual financial audits also as to whether the audits assisted in improving the quality of the financial reporting of the entities.
5.14 The legislature is one of the main users of the SAI’s services. It is from the constitution or legislature that the SAI derives its mandate, and a frequent feature of the SAI’s function is its reporting to the legislature. The SAI can be expected to work closely with the legislature, including with any committees empowered by the legislature to consider SAI reports. Such liaison can contribute to effective follow-up of the SAI’s work
5.15 Special committees created within the legislative body may be charged with examining, in the presence of Ministers, delegates from the audited services and other representatives, the comments in the SAI reports and special communications. The close link between the legislative body and the SAI can also be implemented by a budgetary enquiry as well as by technical assistance to the work of parliamentary committees charged with the examination of draft budgets
5.16 The accountability of the executive to the legislature is ensured through the examination of the SAI reports in the legislative committees like Public Accounts Committee and Committee on Public Undertakings or Enterprises. Based on the examination, recommendations are given by the Committees to correct deficiencies and weaknesses raised by the SAI.
5.17 All reports of the SAI are addressed to the legislature/appropriate body and the Auditor General or a representative traditionally attends the sittings of the Parliamentary/Congressional Committees. The SAI monitors the action taken by ministries, other government departments and other audited entities in implementing the Committees recommendations and submit periodic reports to the Committee on progress made. Sometimes, the Committee can request the head of the SAI General to conduct a specific investigation.
5.18 SAI can provide assistance to the PAC/appropriate body in prioritizing the issues to be selected for examination by concentrating more on governance centric themes or issues of national importance. The parliamentary committees may find out ways to reduce the backlog by arranging to scrutinize current reports so that accountability is not eroded by the passage of years.
5.19 The Committees and the legislatures, in consultation with SAI, can consider introducing a provision, requiring executive departments and other audited agencies to respond to committee recommendations within a certain time frame.
5.20 SAI may establish a separate unit or identify an officer at a sufficiently senior level to coordinate its liaison with the legislature and the committees to facilitate communications and help assure SAI awareness of legislative needs and interests. Protocols may be formulated between the SAI and the legislative committees to provide for long term secondments of SAI functionaries to the legislative secretariats.
5.21 Effective management of its human resources, together with effective quality assurance systems, can assure that the SAI is capable of producing high quality work. But the overall effectiveness of the SAI in achieving greater accountability, economy, efficiency and effectiveness in government entities depends critically on the relationships it establishes and maintains with others. One of the most important of these, the SAI’s relations with Parliament, has been discussed above. Other relationships, however, are also important and warrant continuing high level attention by the leadership of the SAI.
5.22 Developing each of these relationships successfully requires a clear strategy in each case, and may entail considerable effort by the SAI.