Implementation of Financial Attest Auditing Guidelines in state A&E Offices

The Financial Attest Auditing guidelines for audit of State Government Accounts have been adopted by the Department and are effective from April 2015. We had circulated a process intensive structured questionnaire to field Audit offices to understand and appreciate the nature and extent of adoption of the guidelines in its first year of implementation.

2) The responses broadly indicated that barring a few offices, the institutional arrangements of constituting Financial Attest Audit Team (FINAT) and the due processes of risk assessment, sample selection and providing assurance in the envisaged form have been put in place in state audit offices. However, considering the significance of certification of accounts of State Governments we need to carry forward the initiative and strengthen the professional rigour in the conduct of financial attest audit.

3) As you are aware the financial attest audit process and methodology envisaged in the guidelines heavily rely upon your twin roles of compilation of accounts and co-ordination both with the State Governments and the Accountant General (Audit). Your crucial functions of budget review, treasury inspections and review of forest and works accounts provide valuable inputs to the audit side. The responses to the structured questionnaire, however, suggested that the existing mechanism is not effectively synergising these functions with the financial attest audit function of state audit offices. The envisaged quarterly reports on issues emerging from Treasury inspections have not been received by the State Audit offices in most cases. The crucial process of information sharing and collaboration with the Financial Audit Wing of State Audit Offices to support audit offices in their accounting knowledge needs to be institutionalised.

4) Additionally, the potential of data analytical tools have been amply demonstrated and we need to move towards using advanced analytical tools to augment the analytical skills of staff while optimising the potential of VLC with a view to enhancing the degree of assurance on the quality of the accounts.The Department has separately adopted the Big Data Management Policy envisaging a framework for advanced data analytics and preparing the Department for auditing in the digital environment, which is expected to further enhance analytical capabilities.

5) Since the next cycle of financial attest audit would currently be in its initial stages, you may like to consider the above issues for implementation, which would contribute to ensuring greater compliance with the Financial Attest Auditing Guidelinesand ultimately leading to improved assurance on the accounts of the State Government.