Communication in audit

Effective communication binds all staff in a common goal and enhances efficiency, increases motivation, and leads to satisfaction in work done well.

Financial audit; Compliance audit; Performance audit; Review

Concept

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Principles

Communication is crucial in all aspects of our work

from deciding on our overall audit strategy and the programming of our audit tasks,
through to the planning, execution and reporting on individual audits,
getting publicity for our audit results, and
reporting on how the resources made available to us have been used to carry out our mandate.

INTOSAI’s Lima Declaration (

[link new-window title="INTOSAI-P%201" link="https%3A%2F%2Fwww.issai.org%2Fwp-content%2Fuploads%2F2019%2F08%2FINTOSAI-P-1-The-Lima-Declaration.pdf" icon="file-pdf-o" /]

) includes as one of the objectives of independent government auditing communication of information to public authorities and the general public through the publication of objective reports. The International Standards of the Supreme Audit Institutions (ISSAIs) recognise the importance of communication in all aspects of a SAI’s work in its fundamental principles, the Lima declaration, and at numerous other occasions. The

[link title="no%20surprises'%20approach" link="%2Faware%2FGAP%2FPages%2FNo-surprises-approach.aspx" /]

is fundamental to our audit work. Together with

[a-glossary term="professional%20scepticism"]professional scepticism[/a-glossary]

it allows us to carry out our audits in a manner which protects and enhances our independence, integrity, objectivity and professional standing.

Establishing effective communication throughout the audit/review process

Effective communication helps to keep the auditee/reviewee informed about developments in the course of our work. It enhances efficiency, increases motivation, and leads to satisfaction in work done well. Communicating well with our auditees – be they in the EU institutions or other EU bodies, member states or third countries, beneficiaries in the public or private domain – during all phases of our audit gives our auditors and our institution professional credibility. It is particularly important if the auditee is to implement changes and recommendations when the audit is completed. Good communication involves listening to the viewpoints of our auditees. This builds their trust in our work, increases their cooperation, and enhances the impact of our work, as our findings and recommendations are more likely to be acted upon. Ultimately, it leads to improvements in how EU funds are managed and used.

Communication with our auditees and other stakeholders

In the course of our work, auditors always seek to behave and present themselves in a professional manner, as this has an impact on our credibility, integrity and ability to influence, and on the reputation of our institution:

we apply the
[a-glossary term="transparency%20principle"]transparency principle.[/a-glossary]
We need to reflect on what the auditees may find useful to know about us and our audit, and how best to meet these information needs in a complete and appropriate manner. This means that we explain to our auditees (especially beneficiaries, who may not necessarily be experts in EU matters) and all stakeholders and interested parties with whom we communicate our audit aims, our work and results, and we solicit their viewpoints in order to prepare balanced audit reports;
we apply a
[link title="no%20surprises'%20approach" link="%2Faware%2FGAP%2FPages%2FNo-surprises-approach.aspx" /]
, involving regular communication with the auditee throughout the task;
we have a duty of
[a-glossary term="professional%20confidentiality"]professional confidentiality.[/a-glossary]
We do not communicate to third parties, either in writing or orally, any non-public information obtained in the course of our audit work, unless it is necessary to discharge our regulatory responsibilities, in which case specific safeguards are taken. Any such communication is governed by policies and
[link new-window title="decisions%20on%20dealing%20with%20confidential%20information" link="https%3A%2F%2Fwww.eca.europa.eu%2FDocuments%2FInformation_Classification_Policy_EN.pdf" icon="external-link" /]
;
we communicate to the auditee in writing, and at an appropriate level, significant instances of non-compliance and systems weaknesses that we found during, or in connection with, the audit (even if not pertinent to the audit objective);
we use plain language in both spoken and written communication, and avoid jargon;
we are respectful, sensitive and polite at all times when speaking to auditees and beneficiaries of EU support;
whenever possible we communicate in the language of the auditee or beneficiary, using interpreters when necessary;
we strive to maintain good relations with auditees and beneficiaries, based on mutual respect and trust;
we aim to get the information we need quickly and efficiently from the auditee, while minimising the disruption to their work. Good relations between audit staff and auditees are built on mutual respect and trust. Both benefit when the audit team seeks input from the auditees throughout all phases of the audit. Observing professional ethics and due scepticism do not compromise the auditor’s independence, objectivity or the quality of the audit report.

Application of the principles

We apply these principles:

with our principal auditee (Commission, EU Institutions and other EU bodies), and
with all other auditees (member state authorities, third country administrations, international organisations and final beneficiaries);
at each stage of the audit, and
for each level audited (main auditee, other EU and non-EU bodies involved in managing and implementing the budget, member state administrations and SAIs, final beneficiaries).

Communication partners and purpose

Communication partner	Purpose of communication
Other EU Institutions (both as auditees by being managers of the budget, and those involved in the discharge procedure)	Need to be informed about our multi-annual strategy and annual work programmes in order to take account of it in planning their own activities
Member states’ SAIs	Need this same information in order to identify opportunities for coordinating their audits with ours
Audited entities	Need to be informed about audits which concern them, including the subject matter, the scope and approach of our proposed audit

Informing of our strategy and planned audits at institutional level

In the interest of transparency and accountability, the ECA (DOP) prepares and publishes its

[link new-window title="strategy" link="https%3A%2F%2Fwww.eca.europa.eu%2Fen%2FPages%2FStrategy.aspx" icon="external-link" /]

and

[link new-window title="annual%20work%20programme" link="https%3A%2F%2Fwww.eca.europa.eu%2Fen%2FPages%2FWorkProgramme.aspx" icon="external-link" /]

(AWP) detailing planned and on-going audits on the

[link new-window title="ECA%20website" link="https%3A%2F%2Fwww.eca.europa.eu%2Fen%2FPages%2Fecadefault.aspx" icon="external-link" /]

. Both the strategy and AWP is communicated to our main stakeholders, including the Commission, the

[a-glossary term="Discharge%20authority"]Discharge Authority,[/a-glossary]

other EU institutions, the member states’ SAIs and the media. It allows them to have an overview of our work and to take account of it in planning their own activities.

Communication within our institution

For effective communication within our institution, we have to be clear and specific on what we want it to achieve – whether it is briefing an audit team, interviewing someone, writing and presenting findings internally within our organisation or to the audited organisation, or publishing a report aimed at external stakeholders and the general public. Good

[link title="communication%20skills" link="%2Faware%2FGAP%2FPages%2FCommunication-skills-for-auditors.aspx" /]

are therefore essential to all aspects of our work at the ECA – at the institutional, team and individual level.

Instructions

Our instructions on communication in the audit process give the context to our work and set out good practices to use effective communication in the different phases of our audits, from planning, execution and reporting. However, they do not deal with communicating our audit strategy, reporting on how our resources have been used to implement our audit plans, nor the publicity of our reports once published. These matters are dealt with by the Presidency and the College, and are covered by the ECA’s communication strategy.

Communication during the planning phase

Keeping auditees informed about planned and ongoing audits concerning them

It is good practice for audit chamber directorates to establish contacts with their counterparts in the Commission Directorates-General (DGs) and EU bodies at least annually, in order to exchange information on planned and on-going audits, including the work of internal auditors and other inspection staff. This allows auditees to designate liaison officers if not already done. Building a relationship with our auditees allows us to be informed of important events that may have an impact on our current and future work. ECA (DQC) provides the Commission (DG BUDG) with a monthly status overview of information on the start of the planning phase for all selected audit/review tasks and task plans and draft reports/opinions that are planned to be presented for chamber reading in the next three months. This is based on information provided by chambers. At the end of each month, the ECA’s Directorate of the Presidency (DOP) informs member state SAIs about the subjects and foreseen dates of its audit visits planned in their respective country for the next four months. This information is prepared by DOP on the basis of the data encoded in the audit management system (AMS) by audit chambers. Statement of Assurance audits are recurrent tasks. This means that while we have accumulated experience and knowledge of the subject matter and main bodies involved, we still need to keep abreast of new developments and their impact on our audit procedures. Selected audits (which mainly cover performance), on the other hand, vary in terms of subject matter and auditee bodies. Therefore communication channels may not be well established, and preparation is necessary to

[link title="gain%20knowledge%20of%20the%20auditee%20bodies%20and%20audit%20subject" link="%2Faware%2FPA%2FPages%2FPlanning%2FUnderstanding-audit-area.aspx" /]

when

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. It is important to cultivate good professional relations and communication with the auditee from the start. This is particularly important for performance audits as they are often wide-ranging in nature, and require significant levels judgement and interpretation. In the planning phase, discuss with the auditee the audit objectives, questions, scope, risks and how evidence will be collected, as well as partial issues such as timing and arrangements for clearing and the adversarial process. The reporting member can be pivotal in ensuring that the auditee has a clear understanding of the reasons for, and purpose of, the task. This can help the smooth running of the audit process. As a matter of good practice, reporting members (or their offices) are encouraged to establish contact with their counterparts to discuss relevant matters at an early stage of the planning phase. The reporting member can be pivotal in ensuring that the auditee has a clear understanding of the reasons for, and purpose of, the task. Buy-in from the highest levels in the auditee organisation can result in receiving valuable feedback and views, while possibly also enhancing the cooperation extended to the audit team. As a matter of good practice, reporting members (or the private offices) are encouraged to establish contact with their counterparts (or private offices concerned) to discuss relevant matters at an early stage of the planning phase. It is useful to prepare a communication plan for the audit, specifying the ‘who, what and when’ of communication issues throughout the task. When departing from the ECA’s standard approach in this respect, the details should be set out in the

[link title="task%20plan" link="%2Faware%2FPA%2FPages%2FPlanning%2FTask-plan.aspx" /]

Contact with the auditee

Establish initial contact with the auditee through the auditee’s liaison officer. Consult DG BUDG when you are unsure which Commission service is concerned by the audit/review or if you see benefits of appointing a Commission service to coordinate the task. Please put DG BUDG in copy of initial communication, notably when the audit/task concerns multiple Commission services. Keep the auditee’s liaison officer informed of developments, either verbally or by copying them into important communications. Before contacting any auditee staff during the preliminary preparation of the planned audits, it is important to have done a minimum level of research work to avoid giving the appearance we are starting from zero. This involves:

having obtained a minimum level of knowledge of the subject matter, including being familiar with relevant findings of previous annual and special reports, as well as basic information available on the Commission websites and from the European Parliament (discharge decisions, research service etc); and
being aware of other on-going work of the ECA that involves/concerns the auditee organisation (including horizontal tasks, concurrent audits from the same chamber or the current or planned presence of ECA auditors in the same member state).

The audit team informs and discusses with the auditee the work planned, the nature, extent and timing of audit procedures, and how and when audit results will be reported (clearing documents, pre-adversarial reporting and final reporting). Early involvement of the auditee allows them to understand better the purpose of the audit, the audit questions and criteria by which performance will be judged, as well as the methodology to be applied. It gives them the opportunity to provide suggestions as well as to react to potential problems at an early stage.

In-house communication

In-house communication is an important part of the audit planning. For financial and compliance audits, it is useful to hold in-house preparatory meetings to discuss the developments, risks and approach. For performance audits, an

[link title="Issue%20analysis" link="%2Faware%2FPA%2FPages%2FPlanning%2FIssue-analysis.aspx" /]

meeting should be held allowing all the parties concerned (member, director, principal manager, task leader, auditors and other interested parties) to agree on the main audit question and the audit approach;

Communication when carrying out the audit

At the beginning of the task the roles and responsibilities of each team member are assigned, and specific communication activities decided on, including:

[link new-window title="notification" link="%2Faware%2FGAP%2FPages%2FNotification.aspx" /]
to auditees;
[multi-link title="clearing" link_1="%2Faware%2FGAP%2FPages%2FCA-FA%2FExamination%2FClearing.aspx" title_1="Compliance%20and%20financial" link_2="%2Faware%2FPA%2FPages%2FExamination%2FClearing.aspx" title_2="Performance" /]
findings, including the format and deadlines for clearing letters;
arrangements for opening and closing meetings during on-the-spot missions;
the information to be communicated to the auditee and beneficiaries visited on-the-spot (the extent of which will depend on how familiar the audience is with our institution and its work);
the manner of reporting back on missions within the team;
arrangements for regular meetings within the team to discuss progress of the audit.

Specific arrangements apply to our

[link title="relations%20and%20cooperation%20with%20SAIs" link="%2Faware%2FGAP%2FPages%2FCooperation-with-Supreme-Audit-Institutions.aspx" /]

. This notably concerns the

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and clearing arrangements for

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and

[link title="performance%20audits" link="%2Faware%2FPA%2FPages%2FExamination%2FClearing.aspx" /]

. In order to achieve an effective meeting with the auditee (whether face-to-face or via video link), it is good practice to:

inform the staff/services required in good time, and request any information that might be necessary sufficiently in advance;
keep a record of the names and contact details of all those present;
summarise the meeting (or debrief the auditee management at the end of the visit if time allows) with the proviso that issues raised are understood to be provisional until all work is completed;
identify any missing or outstanding information, and agree on a date when it will be made available;
establish a meeting note recording the main discussion points. Ask the auditee to confirm the record if the information obtained from the meeting is expected to support the audit findings.

Systematically give feedback on the mission findings to the Commission (or other auditee bodies), before the clearing documents are prepared, as part of the

[link title="no%20surprises'%20approach" link="%2Faware%2FGAP%2FPages%2FNo-surprises-approach.aspx" /]

. Remember that if a case of suspected fraud is detected, then follow the

[link title="established%20procedure" link="%2Faware%2FGAP%2FPages%2FFraud.aspx%23Suspected-fraud" /]

Communication during the reporting phase of the audit

We should inform those charged with governance of significant observations and on matters relevant to their responsibilities in a timely manner. Before adopting the audit report, the auditees should be given an opportunity to comment on the audit findings, conclusions and recommendations. Audit results should be communicated to the audited entity in such a way that the audited entity can understand them and make such comments as it considers necessary. As a matter of good practice and a step to facilitate the (pre-)

[link title="adversarial%20meetings" link="%2Faware%2FPA%2FPages%2FReporting%2FAdversarial-procedure.aspx" /]

, reporting members (or the private offices) are encouraged to establish contact with their counterparts to discuss the key messages prior to adopting the preliminary observations. We should exchange information regarding management deficiencies with internal auditors and others responsible without breaching the need for data security and confidentiality to ensure that identified shortcomings are addressed, and to assess the feasibility of potential recommendations. Early corrective action on our findings should not prevent us from subsequently reporting problems, as our aim is to improve financial management and use of EU funds; At the end of each audit, we should prepare an objective, fair and constructive written opinion or report that is easy to understand, free from ambiguity, and supported by audit evidence.

Communication tools

Emails are used for sending notifications of audit missions, requests for non-sensitive information and questionnaires.
Clearing documents and all related correspondence is sent using secure electronic transmission. The primary tool for the transmission and storage of clearing documents is CLEAR, which generates emails with ECAfiles links and gives the sender the possibility to edit the message. Sending clearing documents by simple email is not sufficiently secure.
Similarly, we ask auditees to transmit their replies and other documents electronically in a secure manner (e.g. ECAfiles).
Contact the Information Security Officer for advice on transmitting documents containing sensitive or classified information.
We do not grant SAIs access to ECAfiles (or any other file transfer service) unless they are coordinating the reply process for the audit/review concerned.

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Last Modified: 26/09/2022 14:28 Tags:

Communication in audit // <![CDATA[ _spBodyOnLoadFunctionNames.push("setupPageDescriptionCallout"); // ]]>

Communication in audit

Principles

Communication is crucial in all aspects of our work

Establishing effective communication throughout the audit/review process

Communication with our auditees and other stakeholders

Application of the principles

Communication partners and purpose

Informing of our strategy and planned audits at institutional level

Communication within our institution

Instructions

Communication during the planning phase

Keeping auditees informed about planned and ongoing audits concerning them

Contact with the auditee

In-house communication

Communication when carrying out the audit

Communication during the reporting phase of the audit

Communication tools

Communication in audit