Advisory activities in the State Audit Office

Abstract

The history of financial control and audit embraces several hundred years. It goes back to the early Chinese empires as well as to the ancient Greek city-states. The history of state financial audit can historically be divided into three main periods: from the early communities until the French revolution, from the French revolution until and a few years after World War Two and finally from then on until our time. We must however add that this division is evidently not “fine-tuned”. The first appearances of advanced parliamentary financial audit were about 250–300 years ago in contemporary Europe, primarily in Germany, Belgium and in some other countries. The first traces of Hungarian public accounts and accountability, i.e. state audit, can be found in royal treasury accounts and records. The oldest document dates from 1528. Public funds audit became a reality in Hungary after the Compromise of 1867. The State Audit Office was founded in 1870.1 My paper is not aimed at tracing the progress of audits performed by audit institutions, nor does it want to analyse the activity of the supreme financial audit organisation of the Hungarian state, the State Audit Office (SAO), established (re-established) on January 1, 1990. Rather, my study intends to demonstrate that the focuses of SAO audits are gradually being shifted from the traditional computation, i.e. checking the mathematical accuracy of figures, to performance audits, programme evaluations which are also suitable for economic analyses, and by summarising the experience of individual audits and by the “targeted” processing of research results, financial audit leads to an advisory activity that orients public opinion. While the reports prepared about audits, which rely on stringent professional rules and methodological requirements, continue to be a priority, the advisory activity together with the reports enables the supreme national audit institutions – in view of the current challenges – to help Parliaments exercise their legislative and control functions and to contribute to the enhancement of the operational efficiency of the public sector and public finances. My essay offers an insight into how the above practice of the State Audit Office is developed, but it is not aimed at evaluating the content and analysing the impacts of the various recommendations and written compilations made within the framework of the advisory activity. It could probably be the subject of a separate paper.