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External Reviews of Quality Control Systems |
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Office of the Deputy Inspector
General for
Policy and Oversight - Audit Policy and Oversight |
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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. FY 2006 OIG-DOD Quality Control Review Report Military Department Audit Agencies FY 2005 Overall External Peer Review Report Army Audit Agency
Naval Audit Service
Air Force Audit Agency
Intelligence Agencies
Other Defense Organizations
Defense Contract Audit Agency
* 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. |