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113272 1 (1980-01-01)

handle is hein.gao/gaobadrgo0001 and id is 1 raw text is: Who Audits the Auditors? WUiJiam J. Schad t,, -nai a;n assisiani re-yional v:er Atlr, Chdgo ieoional office Hp P~~-;ved a. .-n audit rnanaget rnlati r,.' )I office. Mf Si .amomber andI past president. C 1--i.crPier. Absoclation ol Govern- A~ iu rns. a ,emfired professional , tand fc inpal moderator for ~ ~ F% Tum ct'vtres. As ctlairper- NAu~ Miceslern In)tergovernmental k~\U I jrnMr Sct~ad mnanaged Iho _'_' ) ()of the peer quality and in e tvipwE, and( is the '~~'~ v Kesefi of The title question is, quite legiti- mately. often posed by those subject to the eyes and ears of auditors, Agencies spend about $1 billion every year to conduct Inter- nal audits of agency management and external audits of grantees and contractors. So that this spending may result In improved program operations, audit organizations need periodic evaluation to ensure the quality of their audits. Periodic evaluation Is Important, not only to maintain audit quality. but to maintain confidence in that quality among program managers. legislators, and other audit groups. Auditors need each others confi- dence to avoid unnecessary repeti- tive audits of the same agency, contractor, or grantee-as called for by Office of Management and Budget Circular A-102. They need legislators' confidence to avoid the budget cutters scissors. Most of all, they need the confidence of program managers, who must act on their audit findings. Equally essential Is their credibility in the eyes of the taxpayers, whose faith In government depends partly on them. Am Aswer In May 1978, members of the Midwestern Intergovermental Au- dit Forum met to discuss the question of who should audit the auditors. Its conclusion? Other auditors- The forum set out to devise a peer assessment system. First, we drafted an evaluation guide consis- tent with audit standards of the Comptroller General and the Ameri- can Institute of Certified Public Accountants, The guide Included various evaluation standards for the auditing organization to meet, ac- companied by aids. or criteria, to help a review team assess compli- ance. This guide was then sent to forum members for comment- At- firming their support for the project, 10 agency directors offered their organizations as guinea pigs and nearty 50 audit supervisors and managers volunteered for test re- view teams. Testing the Answer The forum established a commit- tee to fashion questionnaires, de- sign a scoring system, and manage the reviews. The committee chose one agency at each level-Federal, State, and local-and coose five- member teams for each review- Team members represented three Federal Inspector General Offices, the General Accounting Office, and three State and two local govern- ment audit agencies. During a forum meetinG following the tests. panels of team leaders and organization directors candidly described their review experiences. We learned that the tests fostered a fuller understanding of the system among forum members, the com- mittee, review teams, and agency officials. Also significant was the bonus to the agencies-prof as- sional interchange and advice on how policies, procedures, and audit work could be Improved. For our part, the improvements needed were a clear distinction between evaluation standards and aids. a clear reporting format and coherence among the various instruments, and a clear way to decide on compliance with evaluation standards. Revising the Answer To make the improvements, the forum's Executive Administrator and the committee chairperson subjected each standard, aid, and questionnaire statement, line by line. to a seemingly endless list of suggestions and critiques from committee members, team mem- bers, and agency directors. While the process took several months and was sometimes discouraging, we made progress and our concern turned again to enthusiastic opti- mism. GAO e 1cw/Summer 11986

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