External Reviews of Quality Control Systems
Within the Department of Defense, the Office of the Assistant Inspector General for Audit Policy and Oversight (APO), is responsible
for ensuring compliance with the generally accepted Government Auditing
Standards (GAGAS) [Sections 4.(b)(1), 8.(c)(6), and 8.(c)(7) of the IG
Act of 1978, as amended]. In doing so, we have performed the external quality control reviews on some of the DoD audit organizations and facilitated
the reviews or provided oversight of the reviews for others. There are
over 20 audit organizations and over 6,000 auditors within the DoD.
Because of the diversity of the DoD audit organizations, the quality
control systems vary widely and the review process similarly varies widely.
The Requirement:
If an audit organization does work using GAGAS, commonly called “The
Yellow Book,” the organization must have a quality control program
to ensure the quality of its products and that its work complies with
the standards. Specifically, GAGAS states:
“Each audit organization performing audits and/or attestation
engagements in accordance with GAGAS should have an appropriate internal
quality control system in place and should undergo an external peer review.” (paragraph
3.49)
The Quality Control System:
The GAGAS also describes the characteristics of a quality control system:
“An audit organization’s system of quality control encompasses
the audit organization’s structure and the policies adopted and
procedures established to provide the organization with reasonable assurance
of complying with applicable standards governing audits and attestation
engagements. An audit organization’s internal quality control system
should include procedures for monitoring, on an ongoing basis, whether
the policies and procedures related to the standards are suitably designed
and are being effectively applied.” (paragraph 3.50)
“… the systems established by individual audit organizations
will vary as will the need for and extent of their documentation of
the systems. However, each audit organization should prepare appropriate
documentation for its systems of quality control to demonstrate compliance
with its policies and procedures…” (paragraph 3.51)
To help organizations in developing quality control systems, the Government Accountability Office issued Technical Guidance Publication No. GAO/OP-4.1.6, "An Audit Quality Control System: Essential Elements," August 1993.
External Quality Control Reviews:
The GAGAS requires that the audit organization have an external review
of its quality control program:
“Audit organizations performing audits and attestation engagements
in accordance with GAGAS should have an external peer review of their
auditing and attestation engagement practices at lease once every 3 years
by reviewers independent of the audit organization being reviewed.” (paragraph
3.52)
Click on the links below for the latest external reviews of DoD audit organizations' systems of quality control.
OIG-DOD
FY 2006 OIG-DOD Quality Control Review Report
Military Department Audit Agencies
FY 2005 Overall External Peer Review Report
Army Audit Agency
Opinion-June 13, 2005
Letter of Comments-June 13, 2005
Special Access Program Peer Reviews-Report No. D-2008-6-006
Naval Audit Service
Opinion-July 12, 2005
Letter of Comments-July 12, 2005
Special Access Program Peer Reviews-Report No. D-2009-6-001
Air Force Audit Agency
Opinion-September 23, 2005
Letter of Comments-September 23, 2005
Special Access Program Peer Reviews-Report No. D-2008-6-007
Intelligence Agencies
National Security Agency-March 13, 2003
Defense Intelligence Agency-February 14, 2000
National Reconnaissance Office-June 10, 2004
Other Defense Organizations
Special Operations Command-August 21, 2002
Defense Finance and Accounting Service-October 31, 2006
Defense Contract Audit Agency
Review of the Defense Contract Audit Agency
Quality Control System-May 1, 2007
* The
external review of the Office of the Deputy Inspector General for Auditing
is performed under the auspices of the President’s Council on Integrity
and Efficiency.
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