ACRONYMS - cga.nic.in

1 ACRONYMS . AAO : Assistant Accounts Officer AO : Accounts Officer ACL : Audit Command Language ATR : Action Taken Report CA : Controller of Accounts C&AG : Comptroller and Auditor General CAAT : Computer Assisted Audit Techniques CAE : Chief Audit Executive (refers to Pr. CCA/ CCA/ CA). CCA : Chief Controller of Accounts CIPFA : Chartered Institute of Public Finance and Accountancy COSO : Committee of Sponsoring Organizations CVC : Central Vigilance Commission : Deputy Controller of Accounts DDO : Drawing and Disbursing Officer ERM : Enterprise wide Risk Management IAW : Internal Audit Wing ICAI : Institute of Chartered Accountants of India IDEA : Interactive Data Extraction and Analysis IIA : Institute of Internal Auditors IPPF : The International Professional Practices Framework of the IIA.

2 ISSAI : International Standards of Supreme Audit Institutions IT : Information Technology : Principal Chief Controller of Accounts PPS : Programmes, Projects and Schemes Sr. AO : Senior Accounts Officer Chapter Table of Contents Page No. Introduction to Internal Audit in Central Civil Ministries/Departments Background 01. Internal Audit Function 05. I Definition of Internal Audit 05. Mission of Internal Audit 06. Core Principles for the Professional Practice of Internal Auditing 06. General and Section-wise Introduction of Internal Audit Guidelines 07. Detailed Guidelines for Internal audit 11. Internal Audits, Risks and Internal Controls Types of Internal Audit 41.

3 - Compliance Audit 42. - Proprietary Audit 42. - Performance Audit 43. Risk Based Internal Audit Methodology 44. II Conducting Internal Audit Using RBIA Methodology 45. Overview of Internal Control Framework: Risk, Risk Management 46. and Internal Controls Internal Control Framework 50. Internal Auditor's Role in Risk Management 52. Internal Audit of Certain Areas 53. Conclusion 54. Management of Internal Audit in Government Role of the O/o CGA 57. Mission of CGA 57. Organizational Setup of Ministries/ Departments 58. Reporting by CGA to the Expenditure Secretary 58. III Oversight over internal audit in Central Civil 59. Ministries/Departments Mandate of Internal Audit and Audit Committee 59.

4 Internal Audit Charter 60. Managing the Internal Audit Activity 65. Documentation Policy 67. Key Performance Indicators (KPI's) for evaluating Internal Audit 68. IV Other Domains of Internal Audit Gender Audit 71. IT Audit Framework 74. Internal Audit of Governance Processes 80. Quality Assurance Quality Assurance in Internal Audit 85. Benefits of Quality Assurance Program 86. V. Quality Assurance at a Glance 86. Interface with Statutory Auditors 87. Confidentiality of Audit Information 87. Quality in Reporting 88. Human Resource Management Human Resource Management 90. Human Resource Planning 90. VI Obtaining External Service Providers to Support or Complement the 91.

5 Internal Audit Activity Staff Skills, Training and Development 92. The Professional Development Plan 94. Development Plan Components 95. Glossary 96-98. EXHIBITS. EXHIBIT I - Annual Review Format For Internal Audit Wing 99-114. EXHIBIT II - Internal Audit Report Template 115-118. VII EXHIBIT III - Role of Financial Advisor 119-135. EXHIBIT IV - Steps on Risk Based Audit 136-144. EXHIBIT V - Sample Survey for identifying vulnerable areas of IT 145-148. EXHIBIT VI - Risk Register 149-153. Chapter I. Introduction to Internal Audit in Central Civil Ministries/Departments Contents Civil Accounting Organisation and Government Internal Audit.

6 The Secretary as the Chief Accounting Authority responsible for financial management and internal controls. Inspection and Audit of Grantee Institutions. Redefined Charter of Financial Advisers. Guidelines on Internal Audit of Central Civil Ministries and Departments. Internal Audit Definition, Mission and Core Principles Guidelines References Guidelines On Internal Audit Principles for Effective Auditing in Central Civil Ministries/Departments, Code of Conduct and Ethical Guidelines in Government Auditing, Independence and Objectivity, Use of Professional Judgement, Nature of work, Assurance Services. Reading Guidance The Chapter explains the background of the CGA organization, objectives of internal audit and the Guidelines issued by CGA for Effective internal auditing at Central Civil Ministries.

7 Background India has a unique culture and is one of the oldest and greatest civilizations of the world. Mark Twain (Samuel Langhorne Clemens, better known by his pen name, Mark Twain), said India is the cradle of the human race, the birth place of human speech, the mother of history, the grandmother of legends and the great grandmother of tradition. Our most valuable and most instructive materials in the history of man are treasured up in India only . Social responsibility has been an accepted convention in India for ages although most often its manifestation was to be found in philanthropy and community welfare initiatives. Nowadays public expenditure has increased and how the money is spent and the quality of services it provides is an important issue to users of public service and simultaneously tax payers including management.

8 The Audit Institutions play an important role in enhancing good governance for public assets, to foster integrity, transparency, accountability within the public entities. The Internal Audit function is a key component of Public Financial Management. 1. The delinking of Accounts from Audit was culminated into action on inception of 5th Five Year Plan (1974 -1979). Considering the changes essential to improve administrative performance in relation to the requirements of the Fifth Plan, a Group of Ministers (GOM) was constituted in January, 1973. This GOM set up a sub group on 27th February, 1973 to assist and advise on financial management reforms.

9 The sub group of eight members headed by the then Finance Secretary Shri M P Yardi was known as Yardi Committee . The Yardi Committee submitted its report on 14th August, 1973 which was endorsed by Group of Ministers on 4th September, committee while recommending the Departmentalization of Accounts' also proposed Management Accounting System (MAS) and suggested strengthening of Internal Audit System in line Ministries/Departments. Two ordinances namely, The Comptroller and Auditor General's (Duties, Powers and conditions of Service) Amendment Ordinance, 1976 and Departmentalization of Union Accounts (Transfer of Personnel) Ordinance, 1976 were promulgated by Shri Fakhruddin Ali Ahmed, the Hon'ble President of India on 1st March, 1976.

10 The Civil Accounts Organisation head by Controller General of Accounts came into existence on 1st April, 1976. The role and responsibilities of the Civil Accounting Organisation were outlined in the The Allocation of Business Rules' vide notification No. CD-896/80 dated 27th September, 1980 in Annexure of the notification. The Controller General of Accounts is empowered to frame or revise accounts related rules and manuals apart from overseeing the maintenance of standards of accounting in addition to other business like preparation of Annual Financial Statements The Finance and Appropriation Accounts of the Union of India etc.