The SAI is established by an act of Parliament/Legislative body. Parliament appoints the Head of SAI. The Procedure for terminating the appointment of the Head of SAI is by Majority of the Parliament (voting). The head of SAI must be a chartered accountant. The Head of SAI is appointed for a fixed 6 years tenure and/or upto a prescribed age limit of 70 years.
The various conditions of service of the Head of the SAI to secure independence are:
SAI is directly under the legislature. The SAI has financial independence secured through the Budget Committee of the Parliament. The SAI is audited by an independence chartered auditor appointed by Parliament.
The SAI's jurisdiction extends to following:
SAI has jurisdiction over:
SAI has powers of requisitioning all records of the auditee departments/organisations to discharge its mandate as per cf. the National Audit Act Article 7. SAI has powers to enforce or initiate enforcement action to secure access to needed records, which are not produced under the cf. Art 7. SAI has no powers to seal but can search and seize documents and other related items where it considered necessary for its audit and inspection. SAI has no powers to seek testimonials (appearances and answers) of the persons concerned. But it has wide access to governmental information.
SAI has powers to seek co-operation of persons other than the agencies subject to audit and inspection for presenting material or provide testimonials necessary for its audit and inspection. SAI has no powers of instructing government investigating agencies to perform activities considered necessary. Authorities such as the police have a legal mandate themselves. SAI has no power to decide on claims of interested persons in connection with official actions, duties and behaviours of person subject to audit and inspection. SAI has no authority to dispense with, in whole or part, the audit of Federal, Provincial and local Governments accounts and other related matters. It does not have powers to take punitive action and/or impose surcharges. SAI has powers to access the computer systems of the auditees and the power to download and use electronic data either in site. SAI has powers to review the development of computer systems by your auditees and suggest/enforce any controls. SAI has a role in the appointment of other external auditors engaged by the auditee for meeting any statutory requirements. If such external auditors are engaged, SAI has powers to supervise and regulate their work.
The SAI prescribed Financial audit, Compliance audit, Performance audit and EDP audit. SAI conducts Concurrent audit (rarely) and Special investigation by Special audit. The Presidential Committee of the Parliament can call for a special investigation. The audit methodology/procedures followed for each main type of audit conducted by SAI are:
Financial Audit :- Planning + field work + reporting
Performance Audit :- Study selection + field work + review + reporting
SAI cannot discharge judicial functions. The follow-up activity on enforcement of audit findings is limited. SAI has developed its own standards, practices and guidelines in conducting audit and reporting, based on INTOSAI standards and guidelines.
SAI can consult and/or collaborate with other countries/SAIs and international organisations on matters relating to audit. e.g. on Environmental audit and on collaboration with the Nordic countries. The SAI can engage consultants and/or obtain professional services in conducting audit. SAI can also report on acts that infringe upon State economic interest like mass embezzlement of State asserts, serious losses and wastes. But SAI does not require that any fraud or embezzlement be reported mandatorly by the auditees. The SAI has no powers to oversee the ultimate disposal of such cases.
The reporting procedure being followed by SAI on its findings/recommendations-:
SAI has no role on the disposal of action taken report on its findings. SAI does not present an interim report before rendering an annual report on the examination of the closing of accounts of Federal, Provincial and Local governments. SAI has powers to share its audit reports with the public and media after the formal reporting process. In the case of Financial Statement audits, SAI has no power to amend accounts. SAI has an advisory role, Government is not required to consult SAI before taking decision involving substantial consequences, but many times an advice is sought.
SAI is constituted as an audit office with monocratic status i.e. with an Auditor General as head. SAI is empowered to engage external auditors/agencies/consultants as required.
SAI cannot expend resources budgeted independently. SAI has full independence in forming its workplan. SAI is subject to an independent Financial Audit by an independent auditors. SAI is required to submit a report on its activities. It is sent to Parliament and to the general public.