Karen Brutyan, Ph.D.

Karen Brutyan, Ph.D.

Internal Audit Strategy and Law in Armenia

Main Problems Perception. Internal Audit is perceived as another control

body and not as the “Third eye” of the manager. Staffing. Not all public governance and local self-

governance bodies have appointed internal auditors. Relations. Relations between internal audit and various

inspection functions are not clearly defined. Independence. Lack of independence of the internal

auditors. Standards. Internal audit standards not introduced. Training and certification. Training, certification, and CPD

of internal auditors not introduced. No underlying system in place.

Scope. Currently only some financial and compliance audits are conducted.

THE STRATEGY FOR INTERNAL AUDIT IMPROVEMENT

MOFE Methodological guidance and training Monitoring of internal audit in public bodies

PUBLIC GOVERNANCE BODIES Presence of an internal audit division May render internal audit services to public non-commercial organizations as requested by them Small departments may outsource

SUPERVISORY SERVICES OF THE PRESIDENT AND THE PRIME MINISTER No role in internal audit, just access of their reports

LOCAL SELF-GOVERNANCE BODIES

Internal audit unit or outsourced Provide internal audit services to community NCOs as requested by them

Public Non-Commercial Organizations

Internal audit division or outsourcedCommunity Non-Commercial

OrganizationsInternal audit division or outsourced

CHAMBER OF CONTROL Provide an assessment on accuracy of Government’s accounts Make use of internal audit reports for providing a conclusion on reliability of financial systems Assessment of effectiveness/efficiency

PILOTING AND DRAFTING THE LAW

Piloting of the new system in:Central government unit, Local self-government, andPublic non-commercial organization.

Drafting the IA law and establishing the following key principles

Independence from the entity/unit being audited Integrity of internal auditUniform methodologyTransparency and accountability.

Strong support by the WB and EC, technically and politically

Topics for discussion

The limit of the IA beyond the financial audit.

The extent of CHU in evaluation of the internal audit performance.

The further role of the supervision services/inspection

Which body should certify Auditors: CHU or the professional body?

THANK YOU!