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Karen Brutyan, Ph.D.

Karen Brutyan, Ph.D. Internal Audit Strategy and Law in Armenia. Main Problems. Perception. Internal Audit is perceived as another control body and not as the “Third eye” of the manager.

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Karen Brutyan, Ph.D.

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  1. Karen Brutyan, Ph.D. Internal Audit Strategy and Law in Armenia

  2. Main Problems • Perception.Internal Audit is perceived as another control body and not as the “Third eye” of the manager. • Staffing. Not all public governance and local self-governance bodies have appointed internal auditors. • Relations. Relations between internal audit and various inspection functions are not clearly defined. • Independence.Lack of independence of the internal auditors. • Standards.Internal audit standards not introduced. • Training and certification. Training, certification, and CPD of internal auditors not introduced. No underlying system in place. • Scope.Currently only some financial and compliance audits are conducted.

  3. THE STRATEGY FOR INTERNAL AUDIT IMPROVEMENT • MOFE • Methodological guidance and training • Monitoring of internal audit in public bodies • CHAMBER OF CONTROL • Provide an assessment on accuracy of Government’s accounts • Make use of internal audit reports for providing a conclusion on reliability of financial systems • Assessment of effectiveness/efficiency • PUBLIC GOVERNANCE BODIES • Presence of an internal audit division • May render internal audit services to public non-commercial organizations as requested by them • Small departments may outsource • LOCAL SELF-GOVERNANCE BODIES • Internal audit unit or outsourced • Provide internal audit services to community NCOs as requested by them • Public Non-Commercial Organizations • Internal audit division or outsourced Community Non-Commercial Organizations Internal audit division or outsourced • SUPERVISORY SERVICES OF THE PRESIDENT AND THE PRIME MINISTER • No role in internal audit, just access of their reports

  4. PILOTING AND DRAFTING THE LAW • Piloting of the new system in: • Central government unit, • Local self-government, and • Public non-commercial organization. • Drafting the IA law and establishing the following key principles • Independence from the entity/unit being audited • Integrity of internal audit • Uniform methodology • Transparency and accountability. • Strong support by the WB and EC, technically and politically

  5. Topics for discussion • The limit of the IA beyond the financial audit. • The extent of CHU in evaluation of the internal audit performance. • The further role of the supervision services/inspection • Which body should certify Auditors: CHU or the professional body?

  6. THANK YOU!

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