For European audit institutions, it is becoming increasingly important to engage their stakeholders in auditing. The goal is to improve the effectiveness of audits. The National Audit Office of Finland (NAOF) also continues cooperation with its stakeholders and its development.
Writers
Hanna Virta
Principal Performance Auditor, D.Sc. (Econ. and Bus. Adm.)
Audit
The spring session of the Working Group on Environmental Auditing of the European Organisation of Supreme Audit Institutions (EUROSAI) was held in Helsinki at the end of April, focusing on the governance of environmental issues from the point of view of auditing. This theme is firmly linked with the 2030 Agenda for Sustainable Development.
One theme discussed at the session, which is also topical at NAOF, concerned the more extensive engagement of different stakeholders in audit activities. The aim is to increase the utilization and effectiveness of audits. Stakeholders cover a large group of different parties that are potentially affected by audits or that are interested in audit results. These include audited entities, Parliament, representatives of media and, of course, citizens. Particularly in environmental audits, the number of stakeholders is often high.
Audit institutions are already engaging stakeholders – at least on paper
The results of the survey presented at the spring session indicate that European audit institutions are already engaging their stakeholders, at least to some extent. Often, stakeholders are mentioned in the strategies of audit institutions and guidelines have been drawn up to engage them. At the same time, however, it was found that engagement-oriented actions are generally not evaluated
In general, stakeholder engagement is not an obligation for the audit institutions, but the interest in engagement rises from the institutions’ own needs. In some countries, an engaging audit have been tested, in which the audit team includes different members of the civic society. The aim is to improve the reliability and transparency of administration.
Successful interaction with stakeholders is important for us
Stakeholder cooperation has a long tradition at NAOF. In addition to our strategy, stakeholders are mentioned in our annual audit plan. A constructive and open dialogue is one of our strategic success factors. We aim to engage different parties by means of surveys, regular meetings and dialogue with each entity being audited.
We conducted our most recent survey for our key stakeholders in 2015. Its goal was to hear what our stakeholders think about the effectiveness of our activities, the success of interaction and stakeholder communication. Currently, the official statements of audited entities on audit reports are published on our website, together with audits. We regularly meet the highest senior officers in the ministries, which is one of our key stakeholder group.
In 2017, NAOF adopted regular feedback practices. We request feedback on performance audits, fiscal policy audits and compliance audits after each audit and on financial audits every other year. On the basis of stakeholder communication practices and our feedback system, we develop our management, interaction and audit processes.
In addition, we are supported by the Scientific Council and the Advisory Board, through which we have a permanent link with our key stakeholders. The Scientific Council consists of experts from whom we can, for example, request statements and comments on the development and evaluation of central government auditing and monitoring. The Advisory Board is a statutory body. Its goal is to maintain our connections to our different partners and monitor the efficiency and service capability of our activities.
The regional reform will expand our auditing right to new regions. We have prepared for the reform by establishing networks with regional preparatory organisations and other audit and evaluation agents.
More actions to develop engagement are in progress – the aim is to have greater effectiveness
NAOF will start preparing a customer relationship programme next autumn. We have already started our preparations to define stakeholders, consider the definition of a customer relationship and identify similar programmes of audit institutions in other countries. When the programme is completed, we will regularly assess the principles of engaging different parties in audit activities.
Our goal is to have a good and appreciative interaction that will enable a better quality audit work. Our audits always focus on state finances. By improving stakeholder cooperation, it is possible also to improve effectiveness on state finances and emphasise state finances point of view.
