The Compendium of Good Practices in Enhancing the Role of Auditing in Tackling Corruption was endorsed in the recent G20 summit which we wrote about earlier.

The ACWG experts stress that the approaches of the G20 countries to the organisation of public audit is based, in particular, on:

• the United Nations Convention against Corruption (UNCAC);
• the International Standards on Auditing;
• the OECD Recommendation on Public Integrity;
• the political declaration of the UN General Assembly special session against corruption entitled “Our common commitment to effectively addressing challenges and implementing measures to prevent and combat corruption and strengthen international cooperation”;
• the Abu Dhabi declaration adopted in the 8th session of the Conference of the States Parties to the UNCAC in 2019;
• the Mexico Declaration on SAI Independence; and
• the INTOSAI Framework of Professional Pronouncement.

Independence of the Supreme Audit Institutions

The report highlights that countries should ensure SAIs’ sufficient independence to empower them to counter corruption. This can be achieved by:

• Granting them a judicial or magisterial status (Spain, Italy, Türkiye and France);
• Providing them with the powers to investigate financial offences, including corruption (France, Italy, Republic of Korea, United States and Türkiye);
• Obliging them to report indicators of corruption detected in the auditing process to specific authorities such as the Parliament and/or legislature (Australia, India, Mauritius, Oman, United Kingdom, Italy and United States), courts (Argentina) and law enforcement agencies (Saudi Arabia, South Africa and Spain);
• Including the fight against corruption in the list of their functions (Russia and Brazil);
• Granting SAIs autonomy in managing the budget etc.

Recruitment and Training of SAIs’ Employees

The implementation of merit-based recruitment, promotion and bonus systems in the SAIs is equally important to build capacity of these institutions.

SAIs have adopted the following types of recruitment processes:

• Public examinations (Brazil, China, India, Republic of Korea, Spain, and Türkiye);
• Specialised recruitment based on the CV analysis, including the assessment of expertise in law, accounting, fraud detection, or auditing (Canada, France, Italy, Saudi Arabia, Japan, Republic of Korea, Indonesia, UK and South Africa).

The assessment of employees’ performance, their equal treatment and transparency should underpin the promotion process.

The ACWG experts also underline the importance of building capacity of SAIs’ employees to detect corruption offences through educational activities such as training and awareness-raising to share expertise and cooperate with other agencies. To this end, the following measures can be adopted:

• Organisation of mandatory training of personnel (Canada and Spain);
• Establishment of investigative units (South Africa);
• Creation of training centres (India, Saudi Arabia, Japan and Oman);
• Publication of internal training material (Spain, India and Indonesia) and the like.

SAIs’ Anti-Corruption Functions

The ACWG experts highlight that particular attention should be paid to ensuring that SAIs have not only the powers to detect corruption, but are also entitled to adopt corrective action when they detect offences, oversee its implementation and impose sanctions in case of failure.

SAIs, in particular, can have:

1. The functions to directly investigate corruption offences and hold perpetrators liable (China, South Africa and Brazil);
2. The right to forward the information on offences to competent authorities, including anti-corruption agencies (Brazil, Republic of Korea, Indonesia, Russia, Canada, Saudi Arabia and Indonesia), for example:

• India’s SAI follows up on its audit recommendations through periodic repeat audits and coordination committees;
• Japan’s SAI notifies the Public Prosecutors Office in cases of suspected corruption;
• Republic of Korea’s SAI can initiate audit procedures at the request of citizens and relevant organizations;
• Türkiye’s SAI prepares criminal complaint warrants and transfers them to relevant judicial authorities.

SAIs’ Cooperation with Other Bodies and Stakeholders

In order to enhance SAIs’ effectiveness in countering corruption, it is also necessary to ensure their cooperation with other bodies, organisations and stakeholders such as:

• Anti-corruption and other competent authorities also in the framework of formal agreements, including technical cooperation agreements (Brazil) and information exchange programmes (Oman);
• International organisations specialising in countering corruption, for instance, in the framework of international forums and drafting of global anti-corruption guiding principles and strategies (Brazil, Republic of Korea, India and United States), membership in working groups (Oman and Argentina), participation as independent external auditors of international organisations such as the International Anti-Corruption Academy (Türkiye);
• Other stakeholders, including civil society organisations, to exchange information and coordinate anti-corruption effort (South Africa);
• Internal auditors to ensure cooperation and exchange of information in regular meetings, organise training (Japan, Spain, Indonesia and China), conduct assessment of internal control systems (Italy, Oman, Spain and Türkiye) etc.

Use of Information and Communication Technologies (ICTs)

Finally, the employment of ICTs such as big data analysis and cross-check of data from different sources to detect suspicious activities and hidden connections between scrutinized individuals is also important in terms of strengthening SAIs’ potential in combating corruption.

Over the recent years, the trend to use ICTs in auditing activities has been registered in many countries:

• South Africa utilises big data analysis to detect fraud;
• Türkiye employs standardized software to analyse data in all audits;
• The Office of the Auditor General of Canada has a data analytics research method team to support audit teams during their audits;
• Germany uses ICTs for auditing travel cost reimbursement and visualizing planning data of federal IT measures;
• India has set up the Centre for Data Management and Analytics to oversee data analytics initiatives within the SAI and is responsible for guiding and implementing data analytics projects.

Challenges and Problems

The report stresses that despite the universal recognition of the SIAs’ role in fighting corruption they continue to encounter the following problems in preventing and combating corruption offences:

• Time constraints, for example, the timebound prescription period for punitive and compensation claims that hinders effective law enforcement in complex corruption-related cases;
• Poor cooperation with law enforcement authorities, including the lack of a “common language” between audit institutions and law enforcement authorities conducting joint activities;
• Lack of qualified personnel;
• Lack of access to exhaustive and accurate data, which hampers the ability to conduct audits in an effective and timely manner.