legal framework and structure. public internal financial control strategy (11.11.2010) focuses on...
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Legal Framework and Structure
Public Internal Financial Control Strategy (11.11.2010) focuses on three activities
Institution of a Centralized Harmonization Unit (CHU), responsible for implementation of a public internal financial control system in compliance with international standards
Internal auditFinancial management and control based on
managerial accountability
CHU2010 – CHU was set up – Directorate for
Methodology of Public Internal Financial Control and Public Procurement within the Ministry of Finance of Armenia; the Directorate is responsible for coordination and monitoring of implementation of financial management, control and internal audit mechanisms developed in conformity with the international standards.
Legal Framework
Reporting line before the RA Law On Internal Audit was passed
Reporting line after the RA Law On Internal Audit was passed
Legal framework (1)RA Law On Internal Audit – 22.12.2010Professional standards of internal audit and rules of
conduct of internal auditors - 11.08.2011Methodological instructions on application of professional
standards of internal audit in Armenia - 08.12.2011 Instructions for development of internal audit guidelines
and Regulations (կանոնակարգ) of internal audit service in public sector of Armenia - 17.02.2012
Templates for internal audit units, internal auditors and regulations (կանոնակարգ) for internal audit units and how to keep them - 28.12.2011
Major requirements to Internal Audit Unit and Internal Audit Committee - 23.02.2012
Legal Framework (2)Regulations for definition of internal audit space and
functions in public sector entities -30.11.2012A template for Regulations of Internal Audit and details for
its elaboration -12.12.2012Procedures for internal audit assessment for the purposes
of quality assurance, as well as procedures for cooperation of internal audit with inspection authorities and external audit -08.08.2013
Draft procedures for certification of internal auditors and main requirements to entities regarding public sector internal audit
Public sector organizationsPublic entitiesLocal authorities, municipalitiesPublic and municipal non-commercial
entitiesCommercial entities with public or
municipal share of over 50 %
Internal audit scheme
Outsourcewho is entitled? Subject to a decision by senior management, it
can be practiced by Commercial entities with public or municipal share of
over 50 %, with a turnover or gross income of up to 2 billion Armenian Drams in the previous year.
Public and municipal non-commercial entities with a turnover or gross income of up to 2 billion Armenian Drams in the previous year.
Outsourcing is allowed only to entities with at least 3 certified internal auditors with at least 3 years of professional experience in internal audit
Head of internal audit unit must have at least 3 years of professional exeprience in internal audit
1 year of relevant experience = 1 year of experience in internal audit
2 years of relevant experience = 1 year of experience in internal audit
Experience in internal audit, control and revision (including Court of Accounts, President, Government, public entities, CB, commercial banks)
Other activities in civil or public service
Experience of members of revision committees in joint stock companies with public or municipal share
Experience of certified auditors in external audit
Internal Audit CommitteeInternal Audit Committee must have at least
3 membersA member of the Internal Audit Committee
must have at least 3 years of professional experience in internal audit
Timeframe for Implementation of Internal Audit System in Organizations01.04.2012г.- Public institutions01.07.2012г.- Public and municipal non-commercial entities
and commercial entities with public or municipal share of over 50 %, with a turnover or gross income of over 500 million Drams in 2011.
01.01.2013г.- City municipalities,Public and municipal non-commercial entities, as well as commercial entities with public or municipal share of over 50 %, with a turnover or gross income of up to 500 million Drams in 2011.
01.01.2016г.- Rural authorities
Presence of internal audit52 public institutions (President’s
Office, Government, People’s Assembly, ministries, commissions, committees, etc.) already have internal audit units
48 city municipalities
Retraining and certification of internal auditorsAccording to Art. 15 item 2 of RA Law On Internal
Audit, internal auditors in public sector who were active before 01.01.2013 became certified internal auditors after a retraining organized by the authorized agency (RA Ministry of Finance)
So far, 188 internal auditors have been retrainedIn 2013, continuous professional training have been
organized for internal auditorsIn 2014, certification of internal auditors