Objectives of compliance audit
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Objectives of compliance audit

Objectives of compliance audit

Compliance auditing is the independent assessment of whether a given subject matter is in compliance with applicable laws and regulations.
Compliance audit
Concept
Ref: 42.100

Definition

Compliance audit comprises the assessment of whether activities, financial transactions and information are in accordance with the applicable rules and regulations. These may include budgetary laws or resolutions, other relevant laws, regulations and agreements, or specific rules.

Principles

General objectives of ECA compliance audits

The aim of the compliance audit performed by the ECA is to report to the discharge authority and other stakeholders on whether the activities, financial transactions and information are, in all material respects, in compliance with the legal and regulatory frameworks which govern them. The legal and regulatory framework consists of treaties, regulations, directives, decisions, budgets, contracts and other instruments which contain rules on how transactions should be managed and budgets implemented.

Objectives of legality and regularity audits

The general audit objective for an audit of the legality and regularity of underlying transactions is to determine whether, in all material respects, the underlying transactions are legal and regular. The audit should ensure that, in all material aspects:
  • the transaction conforms to the relevant requirements of the TFEU , Financial Regulation , specific regulations, implementing rules or any rules internal to the institution required under these regulations;
  • the transaction is eligible under the double legal basis ;
  • the budget line to which the transaction was charged has been approved; and
  • the transaction has actually occurred and been properly recorded.

Assertions in legality and regularity audits

The specific objectives, or
assertions
, for which the auditor should ultimately draw conclusions are:
  • Reality and measurement - underlying operations exist and are accurately determined
  • Eligibility of underlying transactions - eligibility criteria are met for the various transactions
  • Compliance with other regulatory requirements - other (non-eligibility) criteria are met
  • Correctness of calculations - all calculations are correctly undertaken
  • Completeness and accuracy of accounting - all transactions are accounted for, are not included more than once, and are recorded in the correct accounting period and at correct value.

Objectives and assertions in selected compliance audits

Objectives and assertions in selected compliance audits will vary, depending on the subject matter.

Related documents

Standards ISSAI 400
ISSAI 4000/23
ISA 250
Last Modified: 08/01/2021 15:46   Tags: