Working G roup on Quality Assurance

1. Working Group on Quality Assurance Short overview of the results achieved so far and introduction to the objectives of the meeting Ljerka Crnković Jean-Pierre Garitte Yerevan, October 15, 2015

2. Working group on Quality Assurance Content 1. List of events 2. What has been done so far 3. What is missing 4. Objectives of this meeting 4.1.Finalize the scoring system 4.2. Endorse the Good Practice Quality Assessment Guide for Public Sector Internal Audit 4.3. Discuss on possible application of the Guide by IACOP countries

3. 1. List of events • Genesis of QA WG • Skopje, Macedonia October 6-8, 2011 • Workshops • Budapest, Hungary April 17-20, 2012 • Lviv, Ukraine September 24-27, 2012 • Tbilisi, Georgia January 28-30, 2013 • Yerevan, Armenia November 12-15, 2103 • Budva, Montenegro January 28-30, 2014 • Bucharest, Romania December 2-4-, 2014

4. 1. List of events • Study visit • Warsaw, Poland November 15-16, 2012 (Croatia, Albania, Bulgaria) • involvementof • all participants • Workinggroupleaders(Ljerka, Amela, Svilena, NiniandMaksym)

5. 2. What has been done so far • Checklists developed for • Ongoing monitoring • Periodic Self-Assessment by the Internal Audit Unit • Audit Entity Survey • External Quality Assessment performed by the CHU • Internal Quality Assessment of the CHU • Prepared draft Quality Assurance and Improvement Guide Public Sector Internal Auditing

6. 2. What has been done so far • Annex 4 of quality criteria and approaches for external assessment by the CHU • We developed questions and review steps for assessment under each Standard 1. Standard 1000 Purpose Authority and Responsibility 2. Standard 1100 Independence and Objectivity 3. Standard 1200 Proficiency and Due Professional Care 4. Standard 1300 Quality Assurance and Improvement 5. Standard 2000 Managing the Internal Audit Activity 6. Standard 2100 Nature of Work 7. Standard 2200 Engagement Planning 8. Standard 2300 Performing the Engagement 9. Standard 2400 Communicating Results 10. Standard 2500 Monitoring Progress 11. Standard 2600 Communicating the Acceptance of Risks

7. 2. What has been done so far • We developed assessment criteria for assessing each question under the Standards • Two types of assessment criteria • Key assessment criteria • non-compliance with these criteria immediately results in a negative score, which heavily impacts the final assessment • Secondary assessment criteria • non compliance with a secondary assessment criteria has an impact on the final assessment if there are many instances of non-compliance with secondary criteria

8. 3. What is missing Final scoring system for External Quality Assessment performed by the CHU

9. 4. Objectives of this meeting • Finalize the scoring system for the PEM PAL IACOP approach to external assessment of the internal audit function by the CHU • Endorse the Good Practice Quality Assessment Guide for Public Sector Internal Audit • Discuss on possible application of the Guide by IACoP countries

10. 4.1. Finalize the scoring system • We should develop scoring system for each IIA Standard (for now we have scoring system for each question under the IIA Standards) • We should develop final scoring system - if internal audit function is • Compliant • Mostly compliant • Partially compliant • Non compliant with the IIA Standards

11. 4.2. Endorse the Good Practice Quality Assessment Guide for Public Sector Internal Audit Content Preface Acknowledgements Acronyms and Abbreviations • Introduction • Internal Quality Assessment Performed by the Internal Audit Unit 2.1. Ongoing monitoring 2.2.Periodic self-assessment by the internal audit unit 2.3.Audited entity survey • External Quality Assessment Performed by the Central Harmonization Unit • Internal Quality Assessment of the Central Harmonization Unit • Independent External Quality Assessment Performed by an External, Independent Party

12. 4.2. Endorse the Good Practice Quality Assessment Guide for Public Sector Internal Audit Annexes Annex 1 Checklist to Assess Quality Criteria during Ongoing Monitoring of the Internal Audit Activity Annex 2 Checklist to Assess Quality Criteria during the Internal Quality Periodic Self-Assessment Annex 3 Audited Entity Survey Template Annex 4 External Quality Assessment by the Central Harmonization Unit Annex 5 Checklist to Assess Quality Criteria during Internal ssessment of the Central Harmonization Unit

13. 4.3. Discuss on possible application of the Guide by IACOP countries Facts An independent external quality review of the internal audit function • cannot be performed by the CHU (conflict of interest, EU / IIA position) • when outsourced, can be quite expensive

14. 4.3. Discuss on possible application of the Guide by IACOP countries Possible solution • To prepare a team of PEMPAL quality reviewers • How?

15. Working Group on Quality Assurance • Follows • Introduction of the Agenda and • Explanation of tasks