Section II—Analysis of program activity by strategic outcome
Our strategic outcome and results chain
The long-term strategic outcome we seek to achieve is to contribute to better-managed government programs and better
accountability to Parliament through our legislative auditing. We use a results chain to describe our strategic outcome and to
show how we expect to make a difference. The results chain links what we do (conduct audits and other assessments) and what we
deliver (audits, studies, opinions, information, and advice) to the results we expect to achieve in the short, medium, and long
terms. It also describes the various stakeholders and their contributions to improving government operations (Exhibit
5).
Exhibit 5 — Results chain
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![Results chain](/web/20061203191926im_/http://www.tbs-sct.gc.ca/rpp/0607/OAG-BVG/images/ex5_e.gif)
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Our performance measurement and reporting system is aligned with our results chain. We began strengthening our performance
measurement and reporting during the past year in two key ways.
First, we have established external indicators that monitor the usefulness of our work:
- percentage of audited organizations that find our audits good or very good at adding value to their organization
- percentage of government central agencies and/or audited organizations that find our audits assisted in improving the
quality of financial reporting
- percentage of audited organizations that take corrective action in response to qualifications and other matters contained in
our audit opinions
- percentage of performance audit recommendations implemented by audited organizations after four years
In 2006–07, we will set targets and report results against these indicators for each of our four largest sub-activities. In
setting performance targets, we use our past performance as a base. We seek to be realistic while challenging ourselves to achieve
tangible improvements.
Second, for each of these sub-activities, we have also identified three internal performance indicators to measure the
efficiency and effectiveness of our operations:
- percentage of audits produced on time
- percentage of audits produced within established budget
- conclusions of internal and external practice reviews on whether our Quality Management Framework reflects recognized
standards of professional practice and is operating effectively
In 2006–07, we will begin to improve our performance measurement and reporting system to allow us to better monitor, assess,
and report our performance against these indicators in the near future. The results of this work will be evident during the 2006–09
planning period.
Plans and performance targets—Legislative auditing
Our client is Parliament. We need to ensure that Parliament understands our work and considers issues in our reports, and that
we understand the needs and interests of parliamentarians.
Our parliamentary strategy has four objectives:
- Communicate our messages clearly to Parliament.
- Promote the role and work of the Office.
- Ensure that our work remains relevant and useful to parliamentarians.
- Maintain the Office's credibility with Parliament.
We measure our overall success by surveying parliamentarians and monitoring parliamentary responses to our reports. In 2001–02,
we surveyed parliamentarians, including those on the Standing Committee on Public Accounts and the Standing Committee on
Environment and Sustainable Development, using a comprehensive methodology to take into account all aspects of our relationship
with Parliament. We looked at their perception of our Office, our credibility, our performance, and issues they would like the
Auditor General to address in the coming years. We found that 55 percent of parliamentarians surveyed considered our
recommendations and findings to have a positive impact on their committee work.
We planned to survey parliamentarians in 2005; however, the 2004 federal election brought many new members to the House of
Commons. We considered that parliamentarians needed time to familiarize themselves with our mandate and our reports. We will
examine the timing of our next survey following the 2006 federal election. In light of this significant gap between surveys and
the paramount importance of ensuring that we meet Parliament's needs, we are exploring other options to provide us with more
timely feedback from parliamentarians.
We also monitor how our work helps Parliament hold government to account—one of the intermediate outcomes in our results
chain. In our performance report each year, we present examples of Parliament considering issues of accountability, performance,
compliance with authorities, and environment and sustainable development in its legislative and oversight work.
Our four major sub-activities are financial audits, the audit of the summary financial statements of the Government of Canada
(public accounts), special examinations, and performance audits and studies. Our plans and performance targets for these
sub-activities follow.
Financial audits and the public accounts. The Office has statutory responsibilities for the audit of the
summary financial statements of the Government of Canada and the financial statements of the territorial governments; the
financial audits of Crown corporations, other federal corporations, agencies, and organizations; and other financial audit and
related services engagements. As a result of additions to our mandate, we will for the first time audit the Public Sector Pension
Investment Board and the Canadian Race Relations Foundation during the 2006–09 planning period.
Our financial audits provide assurance that financial statements are presented fairly in accordance with Canadian generally
accepted accounting principles or other relevant standards and also, in the case of the summary financial statements of the
Government of Canada, in accordance with the accounting policies of the Government of Canada.
Where required or appropriate, we provide assurance that these organizations comply with the key legislative authorities that
govern their activities. If issues come to our attention during our financial audit work, we recommend to management and the
boards of directors improvements in areas such as financial reporting and internal controls.
We report our observations on the summary financial statements of the Government of Canada in the Public Accounts of Canada,
Volume 1 and publish reports on the use of financial information and other significant issues in the Auditor General's reports to
Parliament. Financial audits of Crown corporations are published annually in the statutory reports of these Crown corporations.
Financial audits of territorial governments are published annually in the public accounts of the territorial governments of
Nunavut, the Yukon, and the Northwest Territories. This year we will conduct more than 130 financial audit and related services
engagements.
Financial audit indicators and targets
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Expected results
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Indicators
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Type of audit activity
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Actual
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Target
2006–07
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Support for our role and work is maintained
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Our work is useful to federal organizations
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Percentage of audited organizations that find our audits good or very good at adding value to their organization1
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Financial audit
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73%
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75%
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Public Accounts
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60%
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Audits provide senior management with confidence in financial information
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Percentage of government central agencies and/or audited organizations that find our audits assisted in improving the
quality of financial reporting2
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Financial audit
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67%
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Public Accounts
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67%
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Our work is relevant to federal and territorial organizations, departments, agencies, and Crown corporations
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Organizations we audit implement our recommendations and use best practices
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Percentage of audited organizations that take corrective action in response to qualifications and other matters contained
in our audit opinions2
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Financial audit
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100%
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Public Accounts
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100%
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1 We conduct surveys for our annual financial audits every two years. The actual result presented is for 2003;
results for 2005 are not available at the time of preparing this report. For the public accounts, we have not reported
performance against this indicator in the past.
2 We have not reported our performance against these indicators in the past for our annual financial audits or
for the public accounts.
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Special examinations. A special examination is a form of performance audit that assesses the management
systems and practices of a Crown corporation and provides an opinion on whether there is reasonable assurance that there are no
significant deficiencies. Most Crown corporations require a special examination of their organization once every five years. Our
special examination reports are addressed to the boards of directors of the corporations. The 2004 federal Budget proposed that
Crown corporations post the reports on their Web sites and table them in Parliament.
The Office performs about 40 examinations over each five-year period (cycle). We are currently conducting the fourth cycle of
special examinations of Crown corporations. In 2006–07, we will report the special examinations of the Canadian Museum of Nature
and the Canadian Air Transport Security Authority.
Special examination indicators and targets
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Expected results
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Indicators
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Target
2006–07
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Support for our role and work is maintained
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Our work is useful to federal organizations
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Percentage of audited organizations that find our audits good or very good at adding value to their organization1
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75%
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Our work is relevant to federal and territorial organizations, departments, agencies, and Crown corporations
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Organizations we audit implement our recommendations and use best practices
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Percentage of audited organizations where qualifications or significant deficiencies contained in our audit opinions in
the third cycle no longer exist in the fourth cycle
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n/a2
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1 We have not reported our performance for this indicator in the past.
2 There was no significant deficiency in our last report on the Canadian Museum of Nature; this will be our
first special examination of the Canadian Air Transport Security Authority.
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In addition to the above-noted performance indicators, we set a target to reduce the time required to conduct the current cycle
of special examinations by 15 to 25 percent over the previous cycle. We will report our progress at the end of the current cycle
of examinations in 2007–08.
Performance audits. Performance audits examine whether government programs are being managed with due regard
for economy, efficiency, and environmental impact, and with measures in place to determine their effectiveness. These audits are
published up to four times a year in the reports of the Auditor General of Canada and the Commissioner of the Environment and
Sustainable Development. In 2006–07, we plan to report the findings of 37 performance audits.
In Spring 2006, we will present a status report on the progress made in implementing our recommendations in
the following audits:
- Canada Revenue Agency's collection of tax debts
- military recruiting and retention in National Defence
- NATO flying training in Canada
- the Canadian Firearms Program
- a five-year status report on Aboriginal issues
- management of voted grants and contributions
- acquisition of leased office space
- management of government: financial information
In our Fall 2006 Report, our performance audits will examine
- National Defence's modernizing of Canada's North American Aerospace Defence (NORAD) systems
- the Royal Canadian Mounted Police pension and insurance funds
- the proper conduct of public business in public safety agencies
- management of financial resources in Health Canada
- large information systems under development
- the government's expenditure management systems
- monitoring of the government's progress in human resource modernization
- the British Columbia treaty process
- implementation of the government's innovation strategy
- the use of acquisition cards in travel and hospitality
- old age security
- government-wide management of personal service contracts
- the integrated relocation program
- a study of international practices of government evaluation
The Commissioner's Report, scheduled for Fall 2006, will report on the theme of climate change, including
- impacts and adaptation
- federal management of climate change, including the contribution of the Canada Foundation for Sustainable Development
Technology
- reduction of greenhouse gases emitted during energy production and consumption
It will also report on
- progress on commitments in departmental Sustainable Development Strategies
- environmental petitions
The Status Report of the Auditor General, scheduled for Spring 2007, will report on actions the government has taken in
response to our audit findings and recommendations. We will examine
- fleet management and provision of marine navigational services at Fisheries and Oceans Canada
- the Royal Canadian Mounted Police forensics laboratories
- the Canadian Space Agency and the National Research Council of Canada
- regulation of medical devices
- the federal government's protection of cultural heritage
- passport services
- management of the quality of health statistics
- the integrity of the social insurance number
- international tax administration
- management of government: financial information
Performance audit indicators and targets
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Expected results
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Indicators
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Actual
20041
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Target
2006–07
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Support for our role and work is maintained
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Our work is useful to federal organizations
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Percentage of audited organizations that find our audits good or very good at adding value to their organization
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54%
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60%
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Our work is relevant to federal and territorial organizations, departments, agencies, and Crown corporations
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Organizations we audit implement our recommendations and use best practices
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Percentage of recommendations implemented by audited organizations after four years
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44%
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50%
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1 Results for 2005 are not available at the time of preparing this report.
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For our performance audits, there are two additional indicators that we track.
Expected results
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Indicators
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Actual
2004–051
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Target
2006–07
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Parliament and federal organizations are engaged in the audit process
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Parliamentary committees engage in hearings or briefings on issues we report
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Percentage of performance audits reviewed by parliamentary committees
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52%
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60%
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Parliament holds government to account
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Parliament endorses our recommendations through its committees
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The Standing Committee on Public Accounts explicitly endorsed our performance audit recommendations in its reports
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72%
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75%
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1 Results for 2005–06 are not available at the time of preparing this report.
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In the past, we reported our performance against a further indicator: the percentage of commitments departments and agencies
reported meeting in their sustainable development strategies. The quality of their reporting has led us to question the
reliability of the percentage reported. Last year we began to develop a new approach to monitoring the commitments and will report
on progress in the future.
Plans and performance targets—Supporting initiatives
The Office organizes its other initiatives, which support its program activity, under three categories: providing a respectful
workplace, operating more effectively, and working collaboratively.
Providing a respectful workplace
We provide a respectful workplace in which employees in our diverse workforce can strive for excellence and realize their full
career potential. Our values of a respectful workplace, trust and integrity, and leading by example define how we conduct our work
and ourselves (Exhibit 3). In addition, the Office strongly supports and integrates in all of its human
resource activities the staffing values of competency, representativeness, non-partisanship, fairness, equity, transparency,
flexibility, affordability, and efficiency.
Our first objective is to provide a work environment where employees are satisfied and engaged. The Office surveys employees
every two years to evaluate its performance and identify opportunities for improvement. An action plan is developed to address the
survey results. The current action plan is focussed on achieving more effective communication of audit methodology, people
management, and internal meetings. We are also addressing internal accountability through improved internal management reporting,
new staff scheduling tools, and increased delegation. Our target is to maintain our high level of employee satisfaction.
The Office currently has three additional objectives for providing a respectful workplace, with their own indicators and
targets. These objectives will be met through our training and recruitment activities.
Objectives
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Indicators
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Actual
2004–05
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Targets
2006–07
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Provide a workplace environment where employees are satisfied and engaged
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Percentage of employees who believe that the Office is either an above-average place to work or one of the best places to
work
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70%1
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70%
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Promote a bilingual workplace
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Percentage of employees in bilingual regions who will meet our language requirements by March 2007
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53%
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100% of our assistant auditors general and principals
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55%
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75% of our directors
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Assemble a workforce that represents the Canadian population
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Representation as a percentage of workforce availability for the four designated groups:
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women
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105%
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100% for each designated group
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people with disabilities
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108%
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Aboriginal peoples
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74%
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members of visible minorities
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68%
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Ensure that qualified, capable employees are available to carry out our mandate
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Number of entry level positions available annually
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18
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20
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Percentage turnover of audit professionals
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8%
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10%
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1 The survey result is from 2004; we survey employees every two years.
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Operating more effectively
Benchmarking our audit services. As part of our efforts to improve the way we work, we undertook a
benchmarking study in 2005 to compare the level of resources we use to deliver our Audit Services (as well as service delivery
expectations) with other organizations of a similar size and nature. The study concluded that, apart from two areas (Knowledge
Management and Communications), the Office delivers its Audit Services at a comparable cost to corporate services in other public
sector organizations in Canada and elsewhere.
Our above-average investment in Knowledge Management is part of a longer-term strategy to improve how we take advantage of
electronic and printed resources to give our staff access to the knowledge and tools they need to do their work. Our additional
investment in Communications reflects the nature of the Office's business, the wider array of services offered, and the
requirement to report in a bilingual environment, unlike some of the other organizations in the benchmarking study.
We undertook this study to identify opportunities to improve the way we operate. As a result, we will examine possibilities for
improved efficiencies in areas such as Finance, Human Resources, and Professional Practices. Action plans to investigate possible
productivity gains in these areas are being developed.
Team structure and workload. The Office also conducted a study in 2005 of audit team structure and workload
distribution to determine if our audit teams are organized in the most effective manner and if our workload is reasonably
distributed across the senior managers. As a result of our findings, new team structures and general management expectations for
our senior managers have been developed and communicated to all staff.
Comptrollership capacity assessment. As part of our commitment to the government's comptrollership initiative,
we conducted a comptrollership capacity assessment in 2003–04. The Office developed a three-year action plan
to address opportunities for improvement identified in the assessment, which is available on our Web site. The
action plan includes initiatives to improve practices in seven areas, including risk management, information management,
integrated financial management systems, and management information and reporting. We are mostly on target in completing the
action plan.
Working collaboratively
We work collaboratively with legislative auditors, federal and territorial governments, and professional organizations.
Federal and territorial governments. We work collaboratively with federal and territorial governments on a
range of issues and initiatives to improve accountability and public sector management. In the Yukon, the Northwest Territories,
and Nunavut, we work with government officials and territorial corporations' managers on issues of mutual concern, improvements to
systems and processes, and improvements to public accountability.
Provincial audit offices. The Canadian Council of Legislative Auditors (CCOLA) comprises the
10 provincial legislative auditors and the federal Auditor General. We participate in a number of its committees and working
groups, including the Strategic Issues Group, the Performance Reporting and Auditing Group, and the Health Study Group. CCOLA's
objectives are to
- share information and experience on matters of mutual concern
- develop audit methodology and professional practices
- improve the quality and performance of legislative auditing in Canada, and
- collaborate with provincial legislative audit offices on issues that are cross jurisdictional.
Canadian professional organizations. The Office staff is involved in many professional organizations in
Canada. The Canadian Institute of Chartered Accountants (CICA) researches current business issues and sets
accounting and assurance standards for business, not-for-profit organizations, and government. The Office is represented on the
Public Sector Accounting Board of CICA (which sets accounting standards for the Canadian public sector) by the Deputy Auditor
General and on the Auditing and Assurance Standards Board, where one of our assistant auditors general is vice-chair.
International professional organizations. International accounting and auditing standards are influencing
Canada's public and private sector standards. Setting of accounting and auditing standards is shifting from the domestic to the
international arena. The Office plays an active role in shaping these standards, particularly as they relate to the public sector.
Key international organizations include the International Organization of Supreme Audit Institutions (INTOSAI)
and the International Federation of Accountants.
As Chair and Secretariat of INTOSAI's Working Group on Environmental Auditing (WGEA), the Office supports
WGEA members by organizing meetings and conferences, and maintaining the WGEA Web site. Fifty-five national audit offices are
members and many more are now doing environmental audits based on the guidance developed by the working group. Over the next two
years, the WGEA will continue to develop environmental auditing tools for supreme audit institutions (SAI), support training and
information exchange, and encourage collaborative audit work on environmental issues.
The Auditor General will continue to chair the Sub-committee on Independence of SAIs, which reports to the Professional
Standards Committee of INTOSAI. The sub-committee will draft a charter and guidelines on SAI independence, present a report on the
results of case studies that test adherence to core principles on independence, and develop an awareness and communications
program.
The Fellowship Program. The CCAF-FCVI Inc.'s International Audit Office Assistance Program
(Fellowship Program) was established in 1980 to help strengthen performance auditing in national audit offices. Funded by the Canadian
International Development Agency, the program brings auditors from national audit offices to Canada for nine months of
training in performance auditing. Next year the Office will train five fellows from developing countries.
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