Office of the Auditor
General of the Union
www.oagmac.gov.mm

Audit Operation

1.          Annual Plans & Quarterly Audit Plans have to be prepared by the Office of the Auditor General of the Union, Region or State Office of the Auditor General, District Audit Offices, Township Audit Offices. The Office of the Auditor-General of the Union, the Office of the Auditor-General of Region or State and District &Township Audit Offices carries out the auditing operations according to the Annual Audit Plan and Quarterly Audit Plan that are drawn up at respective levels based on the following factors concerning the organizations to be audited:-

   (a)    The length of time they have been un-wittingly left unedited.
   (b)    Any occurrence of problems such as irregularities, fraud, misappropriation, losses, etc.
   (c)    The importance of their role in the national development works.
   (d)    Adequate pre-study in preparation for audit.

2.    Prepared Audits Plans have to be approved by the respective Auditor General of the Region or State and Auditor General of the Union.

3.    Before auditing , the auditors would need to survey for identifying appropriate attention is devoted to the different areas of the audit , identifying audit objectives in such areas and describing the expected scope to conduct the audit. And then, after approving audit plan,  we conduct audit work.

4.    It can be classified that there are five types of audit accordingly audit objective. The audit objectives are differed in accordance with the type of audit. Each type of audit has it’s own objective. These are:

   (a)    Financial Audit: The objective of financial audit is usually done to ensure that accounting systems and financial control procedures are operating satisfactorily in practice, financial transactions being properly authorized and to express the professional auditor’s opinion on whether the financial statements are presented true and fair position of operational results and financial position.

   (b)    Performance Audit: Performance Audit can be said that operational audit or 3Es (Economy, Efficiency, Effectiveness) audit.

      (1)Economy: Economy audit is examination to determine whether the audited organization managed and utilised the resources such as man (personnel), money (finance) and material with economical and efficient manner.

      (2)Economy: Economy audit examines whether the organization tries to exercise economy in running its day- to-day operations by procuring goods and services on terms and conditions most favourable to the interest of the State. In other words, it is concerned with minizing the cost of resources used for inputs, having regard to appropriate quality of the output.

      (3)Effectiveness: Effectiveness audit is mostly done to assess whether the organization has effectiveness of programmes in achieving established objectives or obtained the desired results or targets set by itself or by its next higher organization, or whether alternative options have been explored and pursued to realize its aims at  a comparatively low cost.

     (4)Efficiency: Efficiency audit focuses on testing whether the organization is managing and utilizing its resources,including manpower, funds, materials, properties, etc.efficiently. It tries to ensure that the organization has achieved the maximum output for a given input, or has used the minium input for a given output.

   (c)    Compliance Audit: Examination on whether the audited organization follows or comply applicable laws,rules, regulations is compliance audit. Every organization must abide by applicable laws and rules.This type of audit is normally conducted with the financial audit.

   (d)    Propriety Audit: Propriety audit is conducted to determine whether the expenditures incurred from Public Funds are not only in compliance with the financial laws, rules and regulations in force but also must be in conformity with the standards of financial propriety. That is to say the expenditure must be regular and proper from higher audit point of view.

   (e)    Comprehensive Audit: Comprehensive audit is examination with all types of audit as above mentioned in order to express audit opinion and to measure the performance of audited organization.

5.    Besides, it can be categorized the types of audit in accordance with auditing system and function.These are as follows:

   (a)    Continuous Audit: A continuous audit is one where the auditor’s staff is occupied continuously on the accounts the whole year round. The primary objective of continuous audit is to prevent and detect fraud, errors, misstatements and irregularities in time and to correct on time.

   (b)    Final or Completed Audit: A final or completed audit is commonly understood to be an audit which is not commenced until after the end of the financial period, and is then carry on until completed after accepting the financial statements. This is most satisfactory and useful form of audit for small business. In large businesses, however, a completed audit is  rarely practicable because of the presentation of the audited accounts would be delayed beyond a reasonable period.

   (c)    Regular or Bi-annual Audit: Audit engagements were performed annually and audited entities’ financial accounts are audited financial year end. Now we have to examine the performances and Union Budget of audited entities interim basis. By examining the interim financial statements for the six months of financial year,we have an opportunity to prevent irregularities , fraud, misappropriations, losses regarding our country’s property in time and we are able to present our findings in a timely manner. Moreover we can put emphasis on the risk areas which is highlighted from the first six month period audit experiences at the time of the second six month or year end audit. Changing from annual audit to half yearly audit make us more efficient and effective because we can find misappropriations, fraud and irregularities on time.

   (d)    Functional Audit: When errors and misstatements of audit findings are very significant and material, it is not enough by performing normal or regular audit. It is need to further audit in detail or audit in depth.It may be investigation beyond of norminal audit.It may include an audit in detail or special audit to a particular account head or function of audited organization.

   (e)    Audit of Special Assignment or Duty: Audit by assigning authorised official such as President,Chairman of Pyidaungsu Hluttaw, Chairman of Pyithu Hluttaw or Chairman of Amyotha Hluttawan,any Union level organization,any union level of Ministry or Nay Pyi Taw Council that audit of special assignment.

6.    During the course of audit and even thereafter,before the final report is issued,audit findings are thrashed out by holding discussions with the auditee. Only those findings that cannot be so thrashed out are written into the report. However, in the case of important findings such as fraud or misappropriation of cash or stores that need immediate legal action, an interim report is issued thereon without waiting for the completion of entire audit as per audit programme and the issue of the final report.

Follow-up on the audit findings

7.    The auditees are required to make responses to the audit findings within a reasonable period of time after the reports have been issued to them.They are informed of the time limit within which to respond to the audit findings when the reports are sent to them.They have to take necessary action,depending on the seriousness of the audit points and observations in the following ways:

   (a)    Matters that need immediate action:    Immediate action needs to be taken to put a stop to the fraud, misappropriation, wastages or losses occurring at the organization that are brought to light by audit.

   (b)    Matters that need legal action:    Legal action has to be taken in case of fraud or misappropriation that infringe the existing laws.And at the same time,a departmental enquiry should be instituted based on the evidence found, without waiting for the judgement of the court of law.Immediate steps should also be taken either to improve the existing internal control procedures or introduce them, if there has not been any in order to prevent such cases of fraud or misappropriation occurring again in the furture.

(c)    Departmental enquiry:    If in cases where the head of the organization decides that legal action cannot be taken because the evidence is not strong enough to substantiate the charge to be brought against the offender in a court of law,then the departmental action can be taken by holding departmental enquiry if the loss or wastage is considered to have been caused by the carelessness or negligence of or dereliction of duty by the staff of the organization.

(d)    Issues raised for information and improvement:        As regards the issues raised in the report for information and improvement in the work procedures, it will be quite enough if the organization commits itself to take necessary measures occasionally.

8.    If, in the light of the audit findings, action has to be taken against the staff of the audited organization, no preliminary enquiry need be made. The organization must proceed with departmental enquiry accepting the audit findings as the evidence for making a formal charge against the staff concerned.

9.    If the auditees do not make responses to audit reports of different levels of Accounts office within a reasonable period of time, the audit reports submit to the office of the Auditor General of the Union and the office of the Auditor General also have to supervise in order to take necessary action.