The Auditor Office (SAI Cyprus) is established under the constitution. Head of State appoints the Head of the SAI . The Head of the SAI can be removed by Supreme Constitutional Court on account of mental or physical incapacity or misconduct or upon retirement at 60 years of age. The Head of SAI should be a fit and proper person. There is no fixed tenure but an age limit of 60 years.
The various conditions of service of the Head of the SAI to secure independence are:
The SAI 's relation with Executive is that of external editor and of close co-operation with the Legislative. The SAI cooperates with the Judicial and Investigating agencies providing assistance in financial matters. Budget of the Audit office requires its passing from the Executive. The books and records of the Audit office are audited by the audit section who carry out the audit of the Treasury.
The SAI's jurisdiction extends to following and there are no limitations imposed on this jurisdiction.
SAI also has Jurisdiction over following
The SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate as per the constitution. The SAI has powers to enforce or initiate enforcement action to secure access to needed records which are not produced as per constitution. The SAI has power to seal, search and seize documents and other related items considered necessary for audit and inspection. The SAI does not have powers to seek testimonials of the persons concerned and it can not seek co-operation of persons other than agencies subject to audit and inspection..
The SAI does not have powers to instruct government investigating agencies to perform activities considered necessary. The SAI does not have powers to decide on claims of interested persons in connection with official actions, duties and behaviour of persons subject to audit and inspection. Interested persons must apply through the court. The SAI does not have the authority to dispense with, in whole or part, the audit of Federal, Provincial and local Governments accounts and other related matters.
The SAI does not have powers to take punitive action and/or impose surcharges. The SAI has the powers to access the computer systems of the auditees and download and use electronic data either in site or off site. The SAI has the powers to review the development of computer systems by the auditees and suggest controls. The SAI has role in the appointment and supervision of the other external auditors engaged by auditees for meeting the statutory requirements.
According to Law Number N.113(1)/2002 voted by parliament on 12/07/2002 the Auditor General has the authority to request any information and explanations from any person or legal entity who receives a grant, loan or guarantee by the State in order to ensure that the monies have been expended in the prescribed manner (i.e. the AG has the right to audit the end user which he did not have before).
The SAI prescribes Financial, Compliance, Performance and EDP Audits in its scope of Audit. Procedure followed for each type of audit is as follows
Financial Audit : Procedures laid down by international standards on auditing including substantive, compliance and observation procedures on a sample basis.
Performance Audit : Questionnaires, interviews with key players, observation of main operations.
EDP Audit : Use of IDEA package to Extract and analyse data. Compliance testing of general and application controls.
The SAI does not discharge judicial functions. The audit findings are followed up in the course of conducting recurring audit No enforcement can be made by audit office. It is up to the Executive to see through the and Audit office is available to provide any assistance that is necessary. The SAI is required to follow specific standards, practices and guidelines in conducting audit and reporting.
The SAI can not consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit eg. coordinated performance audits with other SAIs . The SAI can engage consultants and/or obtain professional services in conducting audit. The SAI reports on the acts that infringe upon State economic interests like mass embezzlements of state assets etc.
The Management letter to the auditee is also sent to the competent Ministry. Serious matters are also reported to the Minister. Annual reports are submitted to the President who lays it before the Parliament. After formal reporting such audit reports are can be shared with media and public. It has an advisory role in disposal of the action taken on the audit findings. It does not have powers to amend accounts in case of financial statements.
The SAI is constituted as an audit office with monocratic status ie. with an auditor general or equivalent as head. The status of head of SAI is of Independent Officer of the State. It is empowered to engage external auditors/agencies/consultants as required.
The SAI can expend resources budgeted independently. It has independence in forming its workplan. Recruitment and the administration of the staff is done by Public service commission who takes in to consideration the recommendations of the Auditor General. Condition of service are as approved by the Parliament. The SAI is not subject to an independent audit. The SAI is not required to submit a report on its activities to the Parliament.