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System Review Report for the Army Audit Agency DODIG-2018-083

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Background:

The objective of this review was to express the DoD OIG’s opinion on the Army Audit Agency’s design of the system of quality control and compliance based on their peer review and our quality control review of its SAP audits. In performing this review, we along with the Air Force Audit Agency, obtained an understanding of the system of quality control for the Army Audit Agency. In addition, we along with the Air Force Audit Agency tested compliance with the Army Audit Agency’s quality control policies and procedures to the extent considered appropriate.

A system of quality control encompasses the Army Audit Agency’s organizational structure, policies adopted, and procedures established to provide it with reasonable assurance of conforming to Government Auditing Standards (GAS). The elements of quality control are described in GAS.

Scope and Methodology:

We conducted our review in accordance with GAS and  the standards and guidelines established in the September 2014 Council of the Inspectors Generals on Integrity and Efficiency (CIGIE) Guide for Conducting Peer Reviews of Audit Organizations of Federal Offices of Inspector General. In addition, we conducted the reviews of SAP audits in accordance with the CIGIE Quality Standards for Inspection and Evaluation.

For FY 2017, the Air Force Audit Agency reviewed ten Army Audit Agency audit projects. Specifically, the Air Force Audit Agency reviewed:

  • 5 of 61 performance audits issued between July 1, 2016, and December 31, 2016,

  • 5 of 9 attestation engagements issued between January 1, 2016, and December 31, 2016,

  • 2 of 5 non-audit services performed from January 1, 2014, through December 31, 2016,

  • 1 of 21 quality assurance reviews performed from January 1, 2014, through December 31, 2016, and

  • documentation for two audits that were terminated in 2016.

For the review of the Army Audit Agency’s SAP audits, we judgmentally selected two of four SAP audits with reports issued during 2015 and 2016.

Findings:

In our opinion, the system of quality control for the Army Audit Agency in effect for the year ended December 31, 2016, has been suitably designed and complied with to provide management with reasonable assurance of performing and reporting in conformity with applicable professional standards in all material respects. Audit organizations can receive a rating of pass, pass with deficiencies, or fail. The Army Audit Agency received an External Peer Review rating of pass.