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INTERNAL AUDIT MANUAL
EXPENDITURES MADE FROM THE FUNDS
EUROPEAN CONNECTION PROGRAMMING PERIOD 2007 - 2013
• Internal Audit System
• Internal Audit Operations
- Bucharest, October 2008 -
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 2 of 19
CONTENTS
1. Introduction ................................................. .................................................. .............................. 3
2. Legal Framework ................................................ .................................................. .............................. 4
3. Implementing Framework ............................................... .................................................. ....................... 5
4. System Audit ............................................... .................................................. ....................... 9
4.1. Considerations on the general principles of management and control systems ............ 9
4.2. Key requirements and evaluation criteria in the audit system ........................................ ........... 10
4.2.1. The main key requirements regarding the MA /
IBs ................................................ .................................................. ... 10
4.2.2. The main key requirements in terms of the Certification Authority / Bodies
Intermediate ................................................. .................................................. ....................... 15
5. Operational Audit ................................................ .................................................. ................. 17
5.1. Scope and procedure .............................................. ............................................. 17
5.2. Characteristics of operational audit ............................................... .................................. 17
5.3. Operational auditing ............................................... .......................................... 18
5.4. Operational audit ............................................... ......................................... 18
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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1. Introduction
It is intended that this handbook / guide to provide a generally applicable framework
internal audit of operational programs in the context of the programming period 2007 -
2013. Taking into consideration the requirements of the Regulations and guidelines Europene1
directoare2 issued by the European Commission as regards the management system
and internal controls applicable to institutions that are involved in fund management
structural consider it necessary to expose in detail the internal audit activity
to be conducted by specialized departments, taking into account:
1. audit system;
2. operational audit.
Audit system relate to the evaluation of all provisions in art. 58
Council Regulation (EC) no. 1083/2006. For this activity would
be used guidelines issued by the European Commission to achieve a
assessment of these requirements.
Operational Audit covers all measures taken under the audit projects
referred to in art. 62 of Council Regulation (EC) no. 1083/2006.
Audit departments in the institutions that manage EU funds can
achieve both system audit and operational audit. True, the Regulations
Both European audit and operational audit system are given as functions of
Audit Authority. A more detailed analysis reveals that these prevederi3
Audit Authority shall in fact:
"...( A) ensure that audits are carried out to verify the effective functioning
system management and operational control of the program (no auditing system);
(B) ensure that audits are carried out operations on a sample
adequate to verify expenditure declared; ... "(No operational audit)
Such insurance can be obtained by the Audit Authority:
• either by making (the Audit Authority or a designated third party
it) the system audit and operational audit;
• by taking into account certain conditions, results of audit
system and / or operational internal audit conducted by the responsible institutions
European funds management;
• or a combination of the two preceding paragraphs.
1 Council Regulation (EC) no. 1083/2006, Commission Regulation (EC) no. 1828/2006;
2 Guidelines on common methodology for assessing the management and control systems in Member States (period
Programming from 2007 to 2013). Issued by the European Commission DG Regional Policy, DG Employment, Social Affairs and
Equal Opportunities
3 Article 62 (1) (a) and (b) of the Council Regulation (EC) no. 1083/2006
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 4 of 19
In this context it is important that the structures that manage the internal audit
European funds to carry out regularly (annually) as a mission and a system audit
operational audit engagement. The results of these missions must be performed simultaneously
so as to provide an overview of the management of funds
Europe.
2. Legal Framework
The legal framework applicable to the issue considered in this document is composed of
European regulations that pertain to the management of EU funds related
programming period 2007 - 2013 and the guidelines issued by
European Commission under these Regulations. Basically we mean:
• Council Regulation (EC) no. 1083/2006 of 11 July 2006 laying
general provisions on the European Regional Development
European Social Fund and the Cohesion Fund and repealing Regulation
(EC) no. 1260/1999;
• Commission Regulation (EC) no. 1828/2006 of December 2006, establishing rules
to implement Council Regulation (EC) no. 1083/2006 where
laying down general provisions on the European Development Fund
Regional European Social Fund and Cohesion Fund
implementation of Regulation (EC) no. 1080/2006 of the European Parliament
Council of the European Regional Development Fund;
• Guidelines on common methodology for system evaluation
management and control in Member States (programming period 2007 -
2013). Issued by the European Commission DG Regional Policy, DG Employment
Employment, Social Affairs and Equal Opportunities;
• Guidelines on management checks to be carried out by
Member States of operations co-financed by Structural Funds
and Cohesion Fund programming period 2007-2013.
• Council Regulation (EC) no. 1080/2006 of 5 July 2006 on the
European Regional Development Fund and repealing Regulation (EC) no.
1783/1999;
• Council Regulation (EC) no. 1081/2006 of 5 July 2006 on the
European Social Fund and repealing Regulation (EC) no. 1784/1999.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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3. Framework implementation
Recipients of the information contained in this document intended to be
Internal audit departments of the institutions involved in fund management
Europe. Thus the main beneficiaries are:
Beneficiary Institution Department
Ministry of Economy and Finance -
Paying Authority Internal Audit Department
Ministry of Economy and Finance -
POS Management Authority
Increasing Economic Competitiveness
Internal Audit Department
• POS IB
Increase Competitiveness
Economic Ministry for SMEs,
Trade, Tourism and Liberal Professions
Internal Audit Department
• POS IB
Increase Competitiveness
Economic Education,
And Research (NASR)
Internal Audit Department
• POS IB
Increase Competitiveness
Economic Ministry
Communications and Technology
Information
Internal Audit Department
• POS IB
Increase Competitiveness
Ministry of Economy and Economic
Finance (DG Energy Policy)
Internal Audit Department
Ministry of Environment and Development
Sustainable - Managing Authority
SOP
Internal Audit Department
• IB SOP
Bacau - North-East Region 1 Internal Audit Department
• IB SOP
Galati - South-East Region 2 Department of Internal Audit
• IB SOP
Pitesti - 3 South-Muntenia Region Internal Audit Department
• IB SOP
Craiova - Region 4 South-West Internal Audit Department
• IB SOP
Timisoara - Western Region 5 Department of Internal Audit
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Beneficiary Institution Department
• IB SOP
Cluj-Napoca - Region 6 North
West
Internal Audit Department
• IB SOP
Sibiu - Region 7 Centre Internal Audit Department
• IB SOP
Bucharest - Bucharest Region 8
Ilfov
Internal Audit Department
Ministry of Development, Public Works
Public Housing - Authority
Program Management
ROP
Internal Audit Department
• Intermediate Body
ROP
Development Agency
Northeast Regional
Internal Audit Department
• Intermediate Body
ROP
Regional Development Agency
Southeast
Internal Audit Department
• Intermediate Body
ROP
Development Agency
South Muntenia Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
South-West Oltenia Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
West Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
North West Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
Regional Center
Internal Audit Department
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Beneficiary Institution Department
• Intermediate Body
ROP
Development Agency
Bucharest-Ilfov Regional
Internal Audit Department
Ministry of Labour, Family and Equal
Opportunities - Management Authority
Sectoral Operational Programme
Human Resources Development
Internal Audit Department
• Regional Intermediate Body
North Estp entu Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
Southeast Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
South-Muntenia Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
The South West
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
Northwest Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
West Operational Programme
Resources Development
Human
Internal Audit Department
• Regional Intermediate Body
Programme Centre
Sectoral Operational
Human Resources
Internal Audit Department
• IB Ministry
Education, Research and Youth
Operational Programme
Resources Development
Human
Internal Audit Department
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Beneficiary Institution Department
• National Centre for Development
And Vocational Education
Technical Program
Sectoral Operational
Human Resources
Internal Audit Department
• Employment Agency
Employment Program
Sectoral Operational
Human Resources
Internal Audit Department
Ministry of Transport - Authority
Program Management
SOP Transport
Internal Audit Department
Ministry of Interior
Administration - Authority
Program Management
Operational Capacity Development
Administrative
Internal Audit Department
Ministry of Economy and Finance -
Management Authority
Operational Programme
Technical
Internal Audit Department
By this document4 seeks key requirements and awareness of
evaluation methods used by their European auditing by auditors
authorities involved in assessing the management and control systems
Structural and Cohesion Funds (audit authorities, authorities
management / intermediary bodies, certification authorities / bodies
intermediate and final beneficiaries).
It is therefore extremely important that national authorities have the same audit
approach to assessing management authorities / bodies
intermediate and certification authorities / intermediate bodies to ensure
harmonization of audit results, so that auditors from different parts of the chain
control can be based on the work of other auditors.
This document can not cover all situations that may occur in the
fund management. The process of supervision within each audit must
provide assurances that, when expressed as a general conclusion
on the system, this conclusion can be supported with supporting documents, and view
4 What is the basis, among others, in particular the guidelines on common assessment methodology and management systems
In the Member States (programming period 2007 to 2013). Issued by the European Commission DG Regional Policy DG
Employment, Social Affairs and Equal Opportunities
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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expressed audit must be consistent with the findings, citing
adequately documented.
4. Audit System
4.1. Considerations on the general principles of management systems
and control
In accordance with the provisions of Article 58 of Council Regulation (EC) no.
1083/2006, the management and control of operational programs
The Member States shall provide for:
(A) the definition of the functions of the bodies concerned in management, control and
allocation of functions within each body;
(B) the principle of separation of functions between those bodies and
inside each of them;
(C) procedures for ensuring the correctness and regularity of expenditure declared
under the operational program;
(D) accounting systems, surveillance and reliable financial information
computerized
(E) a system of reporting and monitoring where
responsible body entrusts the performance of another body;
(F) arrangements for auditing the functioning of systems;
(G) systems and procedures to ensure an adequate audit trail;
(H) procedures for reporting and surveillance
irregularities and recovering amounts unduly paid.
To perform a system audit is necessary to follow these steps:
• defining the key requirements of applicable regulations (Council Regulation
no. 1083/2006 and Commission Regulation no. 1828/2006);
• defining evaluation criteria for each key requirement to assess
functioning effectively;
• drawing lessons for the effective systems for
each key requirement for every authority;
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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4.2. Key requirements and evaluation criteria in the audit system
Evaluation criteria are presented for each core requirement. Lack of
According to these criteria imply a risk of unjustified expenses and allowances
Commission, and the risk of over-reimbursement by Member States.
Key requirements include:
1. Management Authority and any intermediary body that has been
delegated tasks (seven key requirements);
2. Certification Authority and any intermediary body that has been delegated
task (four key requirements);
4.2.1. The main key requirements in terms of authority
Management / IBs
Key requirement. 1: There must be a clear definition of their (MA / IB), the
allocation and separation of functions between and within the authority of management /
Intermediate body (art. 58), b), e), 59.2, 59.3, and Article 60 of the R 1083. 12, 13.5
and 22 b) of R 1828
Evaluation Criteria:
There should be:
1. appropriate procedures in the management authority to effectively monitor
implementation of the tasks delegated to the intermediary.
2. a clear definition and allocation of functions (organization, indicative number of posts
procedures and manuals), including an agreement to establish clearly
tasks are delegated authority by the management body
intermediary.
Key requirement. 2: There must be adequate procedures for the selection
operations (projects) (art. 60) and other art. 65 a) of R 1083 and art. 5 and art. 13.1 R
1828)
The objective is to obtain assurance that there is transparency, equal treatment and
completeness of the selection process.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Evaluation Criteria:
3. Requests for submission should be published projects - does not apply in cases
direct allocation of EU funds on certain projects of national, regional or local.
(Requests for lodging projects in accordance with the terms and scope
operational, should contain a clear description of the selection procedure used
and the rights and obligations of beneficiaries. An application for such projects
be published in order to reach all potential beneficiaries ...).
4. All projects received should be recorded - does not apply in cases
direct allocation of EU funds on certain projects of national, regional or local.
(Projects should be registered with the receipt, proof of receipt must be issued
each applicant and must keep records on each approval stage
applications).
5. All projects should be evaluated in accordance with applicable criteria.
(The assessment should be applied consistently, criteria / scores were used
be in accordance with those approved by the Monitoring Committee
listed in
application for the project, the results must be documented. Should also
properly assessed the financial, administrative and operational
beneficiaries to meet their responsibilities regarding party funding
own).
6. Decisions on acceptance or rejection of projects should be
communicated to the applicants.
(Decisions should be taken by a person / body designated such results
be notified in writing the reasons for acceptance or rejection of such projects
be clearly indicated. The procedure for appeals (appeals) and decisions on
it should be published).
Key requirement. 3: There must be adequate information and a strategy
provide assistance and guidance to the final beneficiaries (art. 56, art. 60 c), d), f) R
1083 and art. 13.1 R 1828)
The objective is to ensure that beneficiaries are informed about their rights and
their responsibilities in terms of providing its own funds and
that assistance will be given on these rights and responsibilities.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Evaluation Criteria:
7. Effective communication with beneficiaries on their rights and obligations, in particular
on: national eligibility rules established for the program, the Community rules
on the eligibility conditions specific to products or services
to be delivered under the project financing plan, the deadline for
execution, the requirements for separate account or separate account codes for
Accounting can be pursued, how the information storage and communication.
Publicity and information obligations should also be clearly established
and communicated to them (final beneficiaries) (the letters of approval of funds
decisions ...).
8. The program must be national eligibility rules and lack clear
ambiguity.
9. Existence of a strategy to ensure that beneficiaries have access to information
necessary and that they receive an appropriate level of guidance (leaflets, brochures,
seminars, workshops, web sites ...).
Key requirement. 4: There must be adequate verification of management (Art.
60 b), g) of R 1083 and art. 13.2-13.4 R 1828) (see Guidance document on management
Be carried out by verifications to Member States on Operations co-financed by the Structural Funds and
the Cohesion Fund for the 2007 - 2013 Programming Period)
The objective is to obtain assurance that appropriate procedures are
to verify delivery of goods and services in order to ensure the reality
declared expenditure and compliance with the Commission's decision to grant conditions
funds, national and Community legislation, in particular with regard to eligibility
expenditure, public procurement, state aid, environmental protection, equal opportunities and
information and publicity.
It is essential that sufficient staff is allocated for carrying out the
management, taking into account the qualifications and experience.
Evaluation Criteria:
10. The existence of written procedures and checklists comprehensive
to detect material errors. This means that the checklists should be
targeted checks on:
• correctness of the claim for reimbursement;
• eligible period;
• compliance with the approved design;
• Approved funding compliance rate (if applicable);
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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• compliance with relevant rules of eligibility, and regulations
Community and national rules on public procurement, state aid, environment,
advertising and equal opportunity;
• reality project, including physical progress of the product / service and
compliance with the terms and conditions of the grant;
• costs declared the existence of audit trail.
11. Before certifying the expenditure should be carried out administrative checks on
spending on that statement.
12. All requests for reimbursement submitted by the beneficiaries would be subject
administrative verification should include both an examination of the application itself, as
and relevant supporting documents attached.
13. Spot checks should be made when the project is advanced,
both physically and in terms financially (for example,
training measures).
14. Evidence should be kept on:
• administrative checks and spot checks, including the work
performed and results obtained;
• monitoring (watching remedy) made findings.
15. If the spot checks are not exhaustive, activity
sample of projects should be based on a proper risk assessment and
documents drawn up to identify projects to be selected, describe the method of
sample used to provide an overview of the findings of both
checks have been drawn and the irregularity.
16. Existence of procedures approved by management to
ensure that the certifying authority receives all necessary information on
verifications for certification.
Key requirement. 5: adequate audit trail (Article 60 c), d), f), Art. 90 R
1083 and art. 15 R 1828)
Sufficient audit trail is level when management authority
it allows reconciliation of the total amount certified to the individual expenditure
registered and supporting documents are available at all levels
administrative level by the final beneficiary.
Evaluation Criteria:
17. Project accounting records should be kept at a level
appropriate management and should provide detailed information on
actual costs incurred in each project co-financed by the beneficiary. System
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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accounting allows both beneficiaries and other bodies involved to identify
payment together with its supporting documents.
18. Technical specifications and financial plan of project monitoring reports and
progress, documents relating to the implementation, evaluation, selection, approval
funds, tendering and contracting procedures and inspection reports
the co-financed products and services should be kept at an appropriate level
management.
19. Authority management should be a check whether beneficiaries remain
separate accounting system or an adequate accounting code for all
transactions relating to health, coding for verifying:
• proper allocation of costs relating only to the co-financing;
• certain types of expenses are considered eligible only within certain limits
or proportional to other costs.
20. There should be procedures to provide assurances that all
documents necessary to ensure an adequate audit trail are held in
accordance with the requirements of Article 90 of Regulation 1083/2006, ie
the availability of documents.
Key requirement. 6: Circumstances reliable accounting, monitoring systems and
financial reporting in computerized form (Art. 58 d) and art. 60 c), R 1083, Art.
14.1 and Annex III of Reg. 1828/2006)
Evaluation Criteria:
21. The existence of computer systems capable of providing reliable and
relevant (procedures exist to ensure maintenance of the system, data protection
and integrity, the system provides all information required by Annex III
R1828/2006).
Key requirement. 7: There are preventive measures and corrective actions if
systemic errors are detected by the audit (Article 98.1 of the R 1083 and art. 16.3 of R
1828)
If errors detected by the audit authority of a systemic
and therefore a risk for other operations under the operational program
competent authorities should take preventive and corrective actions.
Evaluation Criteria:
22. There must be procedures in place to ensure monitoring and
Tracking the results of all audits conducted by audit bodies
responsible in accordance with Article 62 of the R 1083 and that this monitoring is
adequately documented.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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23. There must be procedures to ensure the implementation of preventive actions
and corrective actions for the detection of system errors.
4.2.2. The main key requirements in terms of authority
Certification / IBs
Key requirement. 1: Define clear allocation and separation of functions between and within
Certification Authority / Intermediate body (art. 58), b), 59.2, 61 R
1083 and art. R 12 of 1828)
Evaluation Criteria:
24. Following the principle of separation of functions between the certification authority and
management authority and within these bodies (certification authority and
IBs).
25. In the certification authority are procedures in place to monitor
effective performance by the intermediary of the delegated tasks.
26. There must be a clear definition and allocation of functions (plan, the number of
jobs, manual of procedures), including an agreement that would establish
tasks that are delegated by the certifying authority by the body
intermediary.
Key requirement. 2: adequate audit trail and computer system (art. 61
b) e) R 1083, Art. 15 R 1828)
Evaluation Criteria:
27. Proper accounting records of expenditure declared to the Commission should
be kept in computerized form.
EUROPEAN CONNECTION PROGRAMMING PERIOD 2007 - 2013
• Internal Audit System
• Internal Audit Operations
- Bucharest, October 2008 -
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 2 of 19
CONTENTS
1. Introduction ................................................. .................................................. .............................. 3
2. Legal Framework ................................................ .................................................. .............................. 4
3. Implementing Framework ............................................... .................................................. ....................... 5
4. System Audit ............................................... .................................................. ....................... 9
4.1. Considerations on the general principles of management and control systems ............ 9
4.2. Key requirements and evaluation criteria in the audit system ........................................ ........... 10
4.2.1. The main key requirements regarding the MA /
IBs ................................................ .................................................. ... 10
4.2.2. The main key requirements in terms of the Certification Authority / Bodies
Intermediate ................................................. .................................................. ....................... 15
5. Operational Audit ................................................ .................................................. ................. 17
5.1. Scope and procedure .............................................. ............................................. 17
5.2. Characteristics of operational audit ............................................... .................................. 17
5.3. Operational auditing ............................................... .......................................... 18
5.4. Operational audit ............................................... ......................................... 18
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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1. Introduction
It is intended that this handbook / guide to provide a generally applicable framework
internal audit of operational programs in the context of the programming period 2007 -
2013. Taking into consideration the requirements of the Regulations and guidelines Europene1
directoare2 issued by the European Commission as regards the management system
and internal controls applicable to institutions that are involved in fund management
structural consider it necessary to expose in detail the internal audit activity
to be conducted by specialized departments, taking into account:
1. audit system;
2. operational audit.
Audit system relate to the evaluation of all provisions in art. 58
Council Regulation (EC) no. 1083/2006. For this activity would
be used guidelines issued by the European Commission to achieve a
assessment of these requirements.
Operational Audit covers all measures taken under the audit projects
referred to in art. 62 of Council Regulation (EC) no. 1083/2006.
Audit departments in the institutions that manage EU funds can
achieve both system audit and operational audit. True, the Regulations
Both European audit and operational audit system are given as functions of
Audit Authority. A more detailed analysis reveals that these prevederi3
Audit Authority shall in fact:
"...( A) ensure that audits are carried out to verify the effective functioning
system management and operational control of the program (no auditing system);
(B) ensure that audits are carried out operations on a sample
adequate to verify expenditure declared; ... "(No operational audit)
Such insurance can be obtained by the Audit Authority:
• either by making (the Audit Authority or a designated third party
it) the system audit and operational audit;
• by taking into account certain conditions, results of audit
system and / or operational internal audit conducted by the responsible institutions
European funds management;
• or a combination of the two preceding paragraphs.
1 Council Regulation (EC) no. 1083/2006, Commission Regulation (EC) no. 1828/2006;
2 Guidelines on common methodology for assessing the management and control systems in Member States (period
Programming from 2007 to 2013). Issued by the European Commission DG Regional Policy, DG Employment, Social Affairs and
Equal Opportunities
3 Article 62 (1) (a) and (b) of the Council Regulation (EC) no. 1083/2006
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 4 of 19
In this context it is important that the structures that manage the internal audit
European funds to carry out regularly (annually) as a mission and a system audit
operational audit engagement. The results of these missions must be performed simultaneously
so as to provide an overview of the management of funds
Europe.
2. Legal Framework
The legal framework applicable to the issue considered in this document is composed of
European regulations that pertain to the management of EU funds related
programming period 2007 - 2013 and the guidelines issued by
European Commission under these Regulations. Basically we mean:
• Council Regulation (EC) no. 1083/2006 of 11 July 2006 laying
general provisions on the European Regional Development
European Social Fund and the Cohesion Fund and repealing Regulation
(EC) no. 1260/1999;
• Commission Regulation (EC) no. 1828/2006 of December 2006, establishing rules
to implement Council Regulation (EC) no. 1083/2006 where
laying down general provisions on the European Development Fund
Regional European Social Fund and Cohesion Fund
implementation of Regulation (EC) no. 1080/2006 of the European Parliament
Council of the European Regional Development Fund;
• Guidelines on common methodology for system evaluation
management and control in Member States (programming period 2007 -
2013). Issued by the European Commission DG Regional Policy, DG Employment
Employment, Social Affairs and Equal Opportunities;
• Guidelines on management checks to be carried out by
Member States of operations co-financed by Structural Funds
and Cohesion Fund programming period 2007-2013.
• Council Regulation (EC) no. 1080/2006 of 5 July 2006 on the
European Regional Development Fund and repealing Regulation (EC) no.
1783/1999;
• Council Regulation (EC) no. 1081/2006 of 5 July 2006 on the
European Social Fund and repealing Regulation (EC) no. 1784/1999.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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3. Framework implementation
Recipients of the information contained in this document intended to be
Internal audit departments of the institutions involved in fund management
Europe. Thus the main beneficiaries are:
Beneficiary Institution Department
Ministry of Economy and Finance -
Paying Authority Internal Audit Department
Ministry of Economy and Finance -
POS Management Authority
Increasing Economic Competitiveness
Internal Audit Department
• POS IB
Increase Competitiveness
Economic Ministry for SMEs,
Trade, Tourism and Liberal Professions
Internal Audit Department
• POS IB
Increase Competitiveness
Economic Education,
And Research (NASR)
Internal Audit Department
• POS IB
Increase Competitiveness
Economic Ministry
Communications and Technology
Information
Internal Audit Department
• POS IB
Increase Competitiveness
Ministry of Economy and Economic
Finance (DG Energy Policy)
Internal Audit Department
Ministry of Environment and Development
Sustainable - Managing Authority
SOP
Internal Audit Department
• IB SOP
Bacau - North-East Region 1 Internal Audit Department
• IB SOP
Galati - South-East Region 2 Department of Internal Audit
• IB SOP
Pitesti - 3 South-Muntenia Region Internal Audit Department
• IB SOP
Craiova - Region 4 South-West Internal Audit Department
• IB SOP
Timisoara - Western Region 5 Department of Internal Audit
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Beneficiary Institution Department
• IB SOP
Cluj-Napoca - Region 6 North
West
Internal Audit Department
• IB SOP
Sibiu - Region 7 Centre Internal Audit Department
• IB SOP
Bucharest - Bucharest Region 8
Ilfov
Internal Audit Department
Ministry of Development, Public Works
Public Housing - Authority
Program Management
ROP
Internal Audit Department
• Intermediate Body
ROP
Development Agency
Northeast Regional
Internal Audit Department
• Intermediate Body
ROP
Regional Development Agency
Southeast
Internal Audit Department
• Intermediate Body
ROP
Development Agency
South Muntenia Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
South-West Oltenia Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
West Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
North West Regional
Internal Audit Department
• Intermediate Body
ROP
Development Agency
Regional Center
Internal Audit Department
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Beneficiary Institution Department
• Intermediate Body
ROP
Development Agency
Bucharest-Ilfov Regional
Internal Audit Department
Ministry of Labour, Family and Equal
Opportunities - Management Authority
Sectoral Operational Programme
Human Resources Development
Internal Audit Department
• Regional Intermediate Body
North Estp entu Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
Southeast Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
South-Muntenia Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
The South West
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
Northwest Program
Sectoral Operational
Human Resources
Internal Audit Department
• Regional Intermediate Body
West Operational Programme
Resources Development
Human
Internal Audit Department
• Regional Intermediate Body
Programme Centre
Sectoral Operational
Human Resources
Internal Audit Department
• IB Ministry
Education, Research and Youth
Operational Programme
Resources Development
Human
Internal Audit Department
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 8 of 19
Beneficiary Institution Department
• National Centre for Development
And Vocational Education
Technical Program
Sectoral Operational
Human Resources
Internal Audit Department
• Employment Agency
Employment Program
Sectoral Operational
Human Resources
Internal Audit Department
Ministry of Transport - Authority
Program Management
SOP Transport
Internal Audit Department
Ministry of Interior
Administration - Authority
Program Management
Operational Capacity Development
Administrative
Internal Audit Department
Ministry of Economy and Finance -
Management Authority
Operational Programme
Technical
Internal Audit Department
By this document4 seeks key requirements and awareness of
evaluation methods used by their European auditing by auditors
authorities involved in assessing the management and control systems
Structural and Cohesion Funds (audit authorities, authorities
management / intermediary bodies, certification authorities / bodies
intermediate and final beneficiaries).
It is therefore extremely important that national authorities have the same audit
approach to assessing management authorities / bodies
intermediate and certification authorities / intermediate bodies to ensure
harmonization of audit results, so that auditors from different parts of the chain
control can be based on the work of other auditors.
This document can not cover all situations that may occur in the
fund management. The process of supervision within each audit must
provide assurances that, when expressed as a general conclusion
on the system, this conclusion can be supported with supporting documents, and view
4 What is the basis, among others, in particular the guidelines on common assessment methodology and management systems
In the Member States (programming period 2007 to 2013). Issued by the European Commission DG Regional Policy DG
Employment, Social Affairs and Equal Opportunities
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 9 of 19
expressed audit must be consistent with the findings, citing
adequately documented.
4. Audit System
4.1. Considerations on the general principles of management systems
and control
In accordance with the provisions of Article 58 of Council Regulation (EC) no.
1083/2006, the management and control of operational programs
The Member States shall provide for:
(A) the definition of the functions of the bodies concerned in management, control and
allocation of functions within each body;
(B) the principle of separation of functions between those bodies and
inside each of them;
(C) procedures for ensuring the correctness and regularity of expenditure declared
under the operational program;
(D) accounting systems, surveillance and reliable financial information
computerized
(E) a system of reporting and monitoring where
responsible body entrusts the performance of another body;
(F) arrangements for auditing the functioning of systems;
(G) systems and procedures to ensure an adequate audit trail;
(H) procedures for reporting and surveillance
irregularities and recovering amounts unduly paid.
To perform a system audit is necessary to follow these steps:
• defining the key requirements of applicable regulations (Council Regulation
no. 1083/2006 and Commission Regulation no. 1828/2006);
• defining evaluation criteria for each key requirement to assess
functioning effectively;
• drawing lessons for the effective systems for
each key requirement for every authority;
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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4.2. Key requirements and evaluation criteria in the audit system
Evaluation criteria are presented for each core requirement. Lack of
According to these criteria imply a risk of unjustified expenses and allowances
Commission, and the risk of over-reimbursement by Member States.
Key requirements include:
1. Management Authority and any intermediary body that has been
delegated tasks (seven key requirements);
2. Certification Authority and any intermediary body that has been delegated
task (four key requirements);
4.2.1. The main key requirements in terms of authority
Management / IBs
Key requirement. 1: There must be a clear definition of their (MA / IB), the
allocation and separation of functions between and within the authority of management /
Intermediate body (art. 58), b), e), 59.2, 59.3, and Article 60 of the R 1083. 12, 13.5
and 22 b) of R 1828
Evaluation Criteria:
There should be:
1. appropriate procedures in the management authority to effectively monitor
implementation of the tasks delegated to the intermediary.
2. a clear definition and allocation of functions (organization, indicative number of posts
procedures and manuals), including an agreement to establish clearly
tasks are delegated authority by the management body
intermediary.
Key requirement. 2: There must be adequate procedures for the selection
operations (projects) (art. 60) and other art. 65 a) of R 1083 and art. 5 and art. 13.1 R
1828)
The objective is to obtain assurance that there is transparency, equal treatment and
completeness of the selection process.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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Evaluation Criteria:
3. Requests for submission should be published projects - does not apply in cases
direct allocation of EU funds on certain projects of national, regional or local.
(Requests for lodging projects in accordance with the terms and scope
operational, should contain a clear description of the selection procedure used
and the rights and obligations of beneficiaries. An application for such projects
be published in order to reach all potential beneficiaries ...).
4. All projects received should be recorded - does not apply in cases
direct allocation of EU funds on certain projects of national, regional or local.
(Projects should be registered with the receipt, proof of receipt must be issued
each applicant and must keep records on each approval stage
applications).
5. All projects should be evaluated in accordance with applicable criteria.
(The assessment should be applied consistently, criteria / scores were used
be in accordance with those approved by the Monitoring Committee
listed in
application for the project, the results must be documented. Should also
properly assessed the financial, administrative and operational
beneficiaries to meet their responsibilities regarding party funding
own).
6. Decisions on acceptance or rejection of projects should be
communicated to the applicants.
(Decisions should be taken by a person / body designated such results
be notified in writing the reasons for acceptance or rejection of such projects
be clearly indicated. The procedure for appeals (appeals) and decisions on
it should be published).
Key requirement. 3: There must be adequate information and a strategy
provide assistance and guidance to the final beneficiaries (art. 56, art. 60 c), d), f) R
1083 and art. 13.1 R 1828)
The objective is to ensure that beneficiaries are informed about their rights and
their responsibilities in terms of providing its own funds and
that assistance will be given on these rights and responsibilities.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 12 of 19
Evaluation Criteria:
7. Effective communication with beneficiaries on their rights and obligations, in particular
on: national eligibility rules established for the program, the Community rules
on the eligibility conditions specific to products or services
to be delivered under the project financing plan, the deadline for
execution, the requirements for separate account or separate account codes for
Accounting can be pursued, how the information storage and communication.
Publicity and information obligations should also be clearly established
and communicated to them (final beneficiaries) (the letters of approval of funds
decisions ...).
8. The program must be national eligibility rules and lack clear
ambiguity.
9. Existence of a strategy to ensure that beneficiaries have access to information
necessary and that they receive an appropriate level of guidance (leaflets, brochures,
seminars, workshops, web sites ...).
Key requirement. 4: There must be adequate verification of management (Art.
60 b), g) of R 1083 and art. 13.2-13.4 R 1828) (see Guidance document on management
Be carried out by verifications to Member States on Operations co-financed by the Structural Funds and
the Cohesion Fund for the 2007 - 2013 Programming Period)
The objective is to obtain assurance that appropriate procedures are
to verify delivery of goods and services in order to ensure the reality
declared expenditure and compliance with the Commission's decision to grant conditions
funds, national and Community legislation, in particular with regard to eligibility
expenditure, public procurement, state aid, environmental protection, equal opportunities and
information and publicity.
It is essential that sufficient staff is allocated for carrying out the
management, taking into account the qualifications and experience.
Evaluation Criteria:
10. The existence of written procedures and checklists comprehensive
to detect material errors. This means that the checklists should be
targeted checks on:
• correctness of the claim for reimbursement;
• eligible period;
• compliance with the approved design;
• Approved funding compliance rate (if applicable);
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 13 of 19
• compliance with relevant rules of eligibility, and regulations
Community and national rules on public procurement, state aid, environment,
advertising and equal opportunity;
• reality project, including physical progress of the product / service and
compliance with the terms and conditions of the grant;
• costs declared the existence of audit trail.
11. Before certifying the expenditure should be carried out administrative checks on
spending on that statement.
12. All requests for reimbursement submitted by the beneficiaries would be subject
administrative verification should include both an examination of the application itself, as
and relevant supporting documents attached.
13. Spot checks should be made when the project is advanced,
both physically and in terms financially (for example,
training measures).
14. Evidence should be kept on:
• administrative checks and spot checks, including the work
performed and results obtained;
• monitoring (watching remedy) made findings.
15. If the spot checks are not exhaustive, activity
sample of projects should be based on a proper risk assessment and
documents drawn up to identify projects to be selected, describe the method of
sample used to provide an overview of the findings of both
checks have been drawn and the irregularity.
16. Existence of procedures approved by management to
ensure that the certifying authority receives all necessary information on
verifications for certification.
Key requirement. 5: adequate audit trail (Article 60 c), d), f), Art. 90 R
1083 and art. 15 R 1828)
Sufficient audit trail is level when management authority
it allows reconciliation of the total amount certified to the individual expenditure
registered and supporting documents are available at all levels
administrative level by the final beneficiary.
Evaluation Criteria:
17. Project accounting records should be kept at a level
appropriate management and should provide detailed information on
actual costs incurred in each project co-financed by the beneficiary. System
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
Page 14 of 19
accounting allows both beneficiaries and other bodies involved to identify
payment together with its supporting documents.
18. Technical specifications and financial plan of project monitoring reports and
progress, documents relating to the implementation, evaluation, selection, approval
funds, tendering and contracting procedures and inspection reports
the co-financed products and services should be kept at an appropriate level
management.
19. Authority management should be a check whether beneficiaries remain
separate accounting system or an adequate accounting code for all
transactions relating to health, coding for verifying:
• proper allocation of costs relating only to the co-financing;
• certain types of expenses are considered eligible only within certain limits
or proportional to other costs.
20. There should be procedures to provide assurances that all
documents necessary to ensure an adequate audit trail are held in
accordance with the requirements of Article 90 of Regulation 1083/2006, ie
the availability of documents.
Key requirement. 6: Circumstances reliable accounting, monitoring systems and
financial reporting in computerized form (Art. 58 d) and art. 60 c), R 1083, Art.
14.1 and Annex III of Reg. 1828/2006)
Evaluation Criteria:
21. The existence of computer systems capable of providing reliable and
relevant (procedures exist to ensure maintenance of the system, data protection
and integrity, the system provides all information required by Annex III
R1828/2006).
Key requirement. 7: There are preventive measures and corrective actions if
systemic errors are detected by the audit (Article 98.1 of the R 1083 and art. 16.3 of R
1828)
If errors detected by the audit authority of a systemic
and therefore a risk for other operations under the operational program
competent authorities should take preventive and corrective actions.
Evaluation Criteria:
22. There must be procedures in place to ensure monitoring and
Tracking the results of all audits conducted by audit bodies
responsible in accordance with Article 62 of the R 1083 and that this monitoring is
adequately documented.
Manual auditing of expenditure related to EU funds programming period 2007 - 2013
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23. There must be procedures to ensure the implementation of preventive actions
and corrective actions for the detection of system errors.
4.2.2. The main key requirements in terms of authority
Certification / IBs
Key requirement. 1: Define clear allocation and separation of functions between and within
Certification Authority / Intermediate body (art. 58), b), 59.2, 61 R
1083 and art. R 12 of 1828)
Evaluation Criteria:
24. Following the principle of separation of functions between the certification authority and
management authority and within these bodies (certification authority and
IBs).
25. In the certification authority are procedures in place to monitor
effective performance by the intermediary of the delegated tasks.
26. There must be a clear definition and allocation of functions (plan, the number of
jobs, manual of procedures), including an agreement that would establish
tasks that are delegated by the certifying authority by the body
intermediary.
Key requirement. 2: adequate audit trail and computer system (art. 61
b) e) R 1083, Art. 15 R 1828)
Evaluation Criteria:
27. Proper accounting records of expenditure declared to the Commission should
be kept in computerized form.
AUDIT QUALITY IN
Chamber of Financial Auditors of Romania (CAFR) carry out the audit offices to verify compliance with the quality of the profession and professional.
After the checks are given grades of quality between A and D.
T & T AUDIT SRL has obtained grade A.
COMPUTERISED AUDIT
Companies, especially those belonging to multinational groups, operating with advanced information systems covering both financial and accounting functions, as well as controlling functions, budgets, costs, strengthen international reporting, especially modules include more sophisticated operational technical, with private industry.
Audit profession must keep pace with the evolution of information technology.
A measure of competence in the audit involves the ability to work with databases collected from such systems.
Internationally have established computerized audit techniques (Computer Assisted Audit Techniques - CAATs) involving the collection, processing, selection, structure and dynamics analysis, correlation, investigation of large databases with millions of records.
Computerized audit is a solution to avoid suffocation and audited company, having the possibility to extract only the data and increase working speed and efficiency.
T & T AUDIT is placed in the current requirements of the profession in this regard.
External reporting
Holding regular international subsidiaries prepare for group reporting packages used in strengthening international accounts.
Generally prepared under IFRS, packages vary from one society to another depending on the specific industry, country, group-specific policies.
For accounting, drafting such a package is a professional challenge. Beyond the Romanian accounting skills needed, request packets towards the differences between management accounting systems, accounting policies, currencies and languages.
T & T AUDIT has the necessary experience in preparing, auditing, nurse, design, implementation of such packages.
Another specific challenge that manages a T & T AUDIT for most clients is the preparation of certain reports in English for the consolidated auditors at the headquarters of Groups (Planning Memorandum Completion Memorandum Management Letter Highlights Memorandum Audit Report).
MANDATORY REQUIREMENTS FOR AUDITING
In the international environment, and consequently the Romanian subsidiaries of multinationals if the auditing is done generally for listing on the Stock Exchange, but often is simply a group policy imposed by shareholders.
Under Romanian law, situations in which companies are obliged to conduct a financial audit are defined by Art. 5 OMF 1752/2005 which accounting regulations adopted in Romania in accordance with European Directives, applicable from 2006.
Text of law defines two large families who require audit criteria:
(A) size criteria (defined in Art. 3 of the same law) if the closing of a financial year to meet two of three criteria:
bullet Total assets greater than EUR 3'650'000
bullet net turnover of more than EUR 7'300'000
bullet Average number of employees during the year: less than 50
(2) public companies (defined in the Order 907 of 2005)
bullet Credit Institutions
bullet insurance and reinsurance companies
bullet entities regulated and supervised by the National Securities Commission
bullet companies whose securities are traded on a regulated market
bullet companies and national companies
bullet Legal persons belonging to a group of companies and entering the consolidation by a parent who applies International Financial Reporting Standards
bullet Legal entities other than the above, the benefit of grants or loans with state guarantee.
Subsequently, Ordinance 28/2006, the transformation of leasing companies in non banking financial institution and has co-requirement for auditing financial statements of aceastora (Art. 18 (2)).
Minimum standard AUDIT
Professional standards issued by the Chamber of Financial Auditors Romania (Hot. 44/2005) A financial audit required during a financial year, performance of audit procedures defined in the decree that minimum. Browse Such rules involve, according to the decision of the CAFR, the normal workload of 240 hours for one financial year, which can be reduced up to 180 hours if less complex entities.
In establishing an audit cost, start from the minimum volume of work, plus additional work according to the specific company: significant stocks, or complex reporting systems (packages), or more outlets / subunits, or auditing the page you need to cover the previous year, or complex systems cost, size, etc..
RELATED SERVICES
Audit profession is governed by ethical rules which impose conditions of independent professional auditors to ensure objectivity.
Within these restrictions, the company T & T AUDIT provide tax consultancy and assistance in preparing internal and external reporting.
Besides audit services, based on credentials and professional depending on the situations and needs of customers, the company T & T AUDIT offers professional accounting, valuation of enterprise, evaluation of property, training, consultancy in the cases of mergers, acquisitions, internal procedures and budget preparation, and procedures agreed with the client assignments are configured precisely according to its specific needs.
STATUTORY CONSOLIDATION
Romanian law provides, through OMFP1752/2005 and Accounting Law 82/1991 republished, as Romanian companies that own subsidiaries to prepare and submit consolidated balance sheet beginning with the year ended December 31, 2007, the reporting deadline 30 August. The legislation is consistent with the Seventh European Directive on consolidated accounts.
It reported consolidated balance sheet if the companies go over two of the following three levels:
bulletTotal assets exceeding EUR 17,520,000
Business bulletCifra more than EUR 35,040,000
bulletNumar more than 250 employees.
This balance must be audited.
INTERNAL AUDIT
Despite the similar name, internal audit is very different from the external audit.
Relevant comparisons
Internal Audit
External audit
Coverage
Internal processes within the organization
Financial Statements
Issues of interest
Operational
Accounts
Issues of interest
Economy, efficiency, effectiveness, risks, legal, compliance, internal control, internal rules and procedures
True reflection of reality in financial statements and notes
Rewind time
Permanent
Annual
Who reports
Leadership
Associates
Transparency report
Internal documents, confidential
Audit opinion - Public Document
Analyte and internal control risk
Objective in itself, to verify the efficiency, effectiveness, and provide management unconfirmed identification of measures and optimization
Traveled to document and knowledge organization and identify risks to audit planning, can lead to confidential information management
Relationship between them
Collaborate with external auditors and provides information
Uses information from internal auditors, appreciate the quality of internal control
Fraud
One of the objectives of internal audit is to prevent, deter, identify fraud, and establish control systems to prevent fraud
Elements of fraud can take the auditor's attention during their activity, but not the external auditor's objective of identifying and reporting fraud.
Rules
Law 31/1990 republished requires companies that meet the criteria for external audit must organize the internal audit function.
Hot.CAFR 88/2007 on internal audit
explained above
Examples of internal audit procedures:
bulletVerificarea authorizing payments, purchases, discounts
bulletVerificarea organization offers to investment
bulletVerificari quality assurance systems
bulletExaminarea incidents and errors
bulletSupravegherea projects launched - for example implementation of a program
bulletAnaliza indicators - eg waste rate
bulletCentralizarea intelligence reports - such conclusions after inventory
bulletProceduri against fraud - for example verification of cash transactions, transactions with affiliates, information gathering
After the checks are given grades of quality between A and D.
T & T AUDIT SRL has obtained grade A.
COMPUTERISED AUDIT
Companies, especially those belonging to multinational groups, operating with advanced information systems covering both financial and accounting functions, as well as controlling functions, budgets, costs, strengthen international reporting, especially modules include more sophisticated operational technical, with private industry.
Audit profession must keep pace with the evolution of information technology.
A measure of competence in the audit involves the ability to work with databases collected from such systems.
Internationally have established computerized audit techniques (Computer Assisted Audit Techniques - CAATs) involving the collection, processing, selection, structure and dynamics analysis, correlation, investigation of large databases with millions of records.
Computerized audit is a solution to avoid suffocation and audited company, having the possibility to extract only the data and increase working speed and efficiency.
T & T AUDIT is placed in the current requirements of the profession in this regard.
External reporting
Holding regular international subsidiaries prepare for group reporting packages used in strengthening international accounts.
Generally prepared under IFRS, packages vary from one society to another depending on the specific industry, country, group-specific policies.
For accounting, drafting such a package is a professional challenge. Beyond the Romanian accounting skills needed, request packets towards the differences between management accounting systems, accounting policies, currencies and languages.
T & T AUDIT has the necessary experience in preparing, auditing, nurse, design, implementation of such packages.
Another specific challenge that manages a T & T AUDIT for most clients is the preparation of certain reports in English for the consolidated auditors at the headquarters of Groups (Planning Memorandum Completion Memorandum Management Letter Highlights Memorandum Audit Report).
MANDATORY REQUIREMENTS FOR AUDITING
In the international environment, and consequently the Romanian subsidiaries of multinationals if the auditing is done generally for listing on the Stock Exchange, but often is simply a group policy imposed by shareholders.
Under Romanian law, situations in which companies are obliged to conduct a financial audit are defined by Art. 5 OMF 1752/2005 which accounting regulations adopted in Romania in accordance with European Directives, applicable from 2006.
Text of law defines two large families who require audit criteria:
(A) size criteria (defined in Art. 3 of the same law) if the closing of a financial year to meet two of three criteria:
bullet Total assets greater than EUR 3'650'000
bullet net turnover of more than EUR 7'300'000
bullet Average number of employees during the year: less than 50
(2) public companies (defined in the Order 907 of 2005)
bullet Credit Institutions
bullet insurance and reinsurance companies
bullet entities regulated and supervised by the National Securities Commission
bullet companies whose securities are traded on a regulated market
bullet companies and national companies
bullet Legal persons belonging to a group of companies and entering the consolidation by a parent who applies International Financial Reporting Standards
bullet Legal entities other than the above, the benefit of grants or loans with state guarantee.
Subsequently, Ordinance 28/2006, the transformation of leasing companies in non banking financial institution and has co-requirement for auditing financial statements of aceastora (Art. 18 (2)).
Minimum standard AUDIT
Professional standards issued by the Chamber of Financial Auditors Romania (Hot. 44/2005) A financial audit required during a financial year, performance of audit procedures defined in the decree that minimum. Browse Such rules involve, according to the decision of the CAFR, the normal workload of 240 hours for one financial year, which can be reduced up to 180 hours if less complex entities.
In establishing an audit cost, start from the minimum volume of work, plus additional work according to the specific company: significant stocks, or complex reporting systems (packages), or more outlets / subunits, or auditing the page you need to cover the previous year, or complex systems cost, size, etc..
RELATED SERVICES
Audit profession is governed by ethical rules which impose conditions of independent professional auditors to ensure objectivity.
Within these restrictions, the company T & T AUDIT provide tax consultancy and assistance in preparing internal and external reporting.
Besides audit services, based on credentials and professional depending on the situations and needs of customers, the company T & T AUDIT offers professional accounting, valuation of enterprise, evaluation of property, training, consultancy in the cases of mergers, acquisitions, internal procedures and budget preparation, and procedures agreed with the client assignments are configured precisely according to its specific needs.
STATUTORY CONSOLIDATION
Romanian law provides, through OMFP1752/2005 and Accounting Law 82/1991 republished, as Romanian companies that own subsidiaries to prepare and submit consolidated balance sheet beginning with the year ended December 31, 2007, the reporting deadline 30 August. The legislation is consistent with the Seventh European Directive on consolidated accounts.
It reported consolidated balance sheet if the companies go over two of the following three levels:
bulletTotal assets exceeding EUR 17,520,000
Business bulletCifra more than EUR 35,040,000
bulletNumar more than 250 employees.
This balance must be audited.
INTERNAL AUDIT
Despite the similar name, internal audit is very different from the external audit.
Relevant comparisons
Internal Audit
External audit
Coverage
Internal processes within the organization
Financial Statements
Issues of interest
Operational
Accounts
Issues of interest
Economy, efficiency, effectiveness, risks, legal, compliance, internal control, internal rules and procedures
True reflection of reality in financial statements and notes
Rewind time
Permanent
Annual
Who reports
Leadership
Associates
Transparency report
Internal documents, confidential
Audit opinion - Public Document
Analyte and internal control risk
Objective in itself, to verify the efficiency, effectiveness, and provide management unconfirmed identification of measures and optimization
Traveled to document and knowledge organization and identify risks to audit planning, can lead to confidential information management
Relationship between them
Collaborate with external auditors and provides information
Uses information from internal auditors, appreciate the quality of internal control
Fraud
One of the objectives of internal audit is to prevent, deter, identify fraud, and establish control systems to prevent fraud
Elements of fraud can take the auditor's attention during their activity, but not the external auditor's objective of identifying and reporting fraud.
Rules
Law 31/1990 republished requires companies that meet the criteria for external audit must organize the internal audit function.
Hot.CAFR 88/2007 on internal audit
explained above
Examples of internal audit procedures:
bulletVerificarea authorizing payments, purchases, discounts
bulletVerificarea organization offers to investment
bulletVerificari quality assurance systems
bulletExaminarea incidents and errors
bulletSupravegherea projects launched - for example implementation of a program
bulletAnaliza indicators - eg waste rate
bulletCentralizarea intelligence reports - such conclusions after inventory
bulletProceduri against fraud - for example verification of cash transactions, transactions with affiliates, information gathering
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