Audit Office of the Republic of Cyprus

As was first put forward by Plato and Aristotle 2,500 years ago, an indispensable constituent of any democratic regime is the accountability of governors to the citizens, who are entitled to be informed of the way in which the public authorities manage public resources.

In modern states, the role of the independent auditor of public authorities is bestowed upon Supreme Audit Institutions, which maintain close bonds, in some cases even organisational relationships, with the national Parliament. In Cyprus, the Audit Office of the Republic is the independent body which, under the provisions of the Constitution, is responsible for auditing financial management as exercised by the Executive. Through its audits and reports, the Audit Office provides the citizens and their agents, the House of Representatives, with the objective and reliable information they need to evaluate the performance of the Executive with respect to the management of public resources. In this way, it contributes to transparency, public accountability and the fight against corruption, concepts that are inherent to good administration.

The functioning of the Audit Office is regulated by the Constitution, through several potent provisions, but also by a number of specific and general laws, the most important of which are outlined in the "Legal Framework" subpage of our website. The Law on Fiscal Responsibility and Financial Framework (Law 20(I)/2014) updated, widened and firmly established the mandate of the Audit Office. Pursuant to article 81(2) of Law 20(I)/2014, the Auditor General performs external audit on the basis of internationally recognized auditing standards that he chooses to implement.

The activity framework of Supreme Audit Institutions

The activity of Supreme Audit Institutions in public sector audit around the world is governed by audit standards issued by the International Organisation of Supreme Audit Institutions, known as INTOSAI, which is an autonomous, independent and non-political organisation. INTOSAI is a non-governmental organisation with special consultative status with the Economic and Social Council (ECOSOC) of the United Nations.

In 1977 INTOSAI issued the "The Lima Declaration of Guidelines on Auditing Precepts" (ISSAI 1), which includes references to the purpose and types of audits carried out by Supreme Audit Institutions, the independence of the Institutions and their relationship with the Parliament, the government and the administration, their powers and the audit methods applied.

The basic principles on ensuring the independence of Supreme Audit Institutions were included in the “Mexico Declaration” (ISSAI 10) in 2007 and are summarised as follows:

1. The existence of an appropriate and effective constitutional/statutory/legal framework and of de facto application provisions of this framework.

2. The independence of SAI heads and members (of collegial institutions), including security of tenure and legal immunity in the normal discharge of their duties.

3. A sufficiently broad mandate and full discretion, in the discharge of SAI functions.

4. Unrestricted access to information.

5. The right and obligation to report on their work.

6. The freedom to decide the content and timing of audit reports and to publish and disseminate them.

7. The existence of effective follow-up mechanisms on SAI recommendations.

8. Financial and managerial/administrative autonomy and the availability of appropriate human, material, and monetary resources.

The above principles were adopted by the General Assembly of the United Nations in 2011 with Resolution A/66/209, which was replaced in 2014 by Resolution 69/228. These resolutions highlighted the important role of Supreme Audit Institutions in promoting the efficiency, accountability, effectiveness and transparency of public administration.

All the above are in line with the provisions of the Constitution of the Republic of Cyprus (Articles 115-117), as well as the Law for the Provision of Evidence and Information to the Auditor General of the Republic (Law 113(I)/2002).

The only pending issue remaining is the limited financial independence of the Audit Office, since its budget is approved by the Ministry of Finance, followed by the Council of Ministers. Reference to this matter was made in the Memorandum of Understanding of the Republic of Cyprus with the Troika, according to which the Audit Office should not only be adequately staffed so as to be able to cope with its obligations in a satisfactory manner, but the main issue would be ensuring its financial independence. This independence was put forward by the European Union prior to the accession of Cyprus in 2004 and, since 2011, as explained above, constitutes a basic public governance principle adopted by the United Nations. The Audit Office, after a long period during which no solution of the matter was proposed by the Ministry of Finance, requested the assistance of the Parliamentary Committee for the Monitoring of Development Plans and Control of Public Expenditure, which examined the matter at its meeting on 3rd November 2016. The issue remains pending ever since.

Back To Top