Audit Practice

The Board audits continuously using mainly two audit methods, in-office documentary audit and field audit.

(1) In-office documentary audit

Auditees are required to submit statements of accounts reflecting all financial management for a designated period, with documentary evidence, to the Board according to the Regulations on the Submission of Accounts enacted by the Board to verify the accuracy, legality and reasonableness of such financial management.
While statements of accounts show the numeric results of financial management, the documentary evidence including, but not limited to, contract documents, invoices and receipts helps verify that the statements of accounts are accurate, legal and reasonable.
In addition to the submission of paper-based statements of accounts and documentary evidence, the use of electronic data processing systems (online) or electromagnetic recording media has increased in recent years due to the development of systems in line with the progress of electronic accounting. The Board is continuously examining these statements of accounts and documentary evidence.
Upon finishing the auditing of statements of accounts for the fiscal year, the Board confirms the numerical accuracy of the final account of the State prepared by the Cabinet according to the established procedures.

In-office documentary audit
In-office documentary audit
Documentary evidence stored at the Board
Documentary evidence stored at the Board
Servers for Electronic Vouchers and Other Supporting Documents Management System (Image)
Servers for Electronic Vouchers and Other Supporting Documents Management System (Image)

(2) Field audit

Information which can be obtained from the statements of accounts and documentary evidence submitted to the Board is limited and not always enough to determine the adequacy of financial management or projects implementation.
The Board, therefore, dispatches its auditors to the headquarters and branches of ministries and government agencies, or project sites to conduct field audits. As for local governments that carry out various projects with State subsidies, the Board also conducts field audits to examine whether the subsidies have been used properly. The Board also dispatches staff to various overseas locations such as ODA project sites and the diplomatic missions for audit work.

Sites to be audited are selected by taking into consideration priority audit issues and human resource allocation determined by the Audit Plan, results of the documentary audit, frequency and results of past audits, deliberations in the Diet, and information from the media or public.
In the field audits, auditors examine the actual conditions of administrative work and projects by checking accounting books as well as documentary evidence which is retained by the auditees, interviewing the officials in charge and other relevant persons, observing property management, and inspecting completed physical works.
Most audit findings reported in the Audit Report are brought to light through the field audits, which are of great importance in the audits conducted by the Board.
(Note) The photos below were taken before the COVID-19 pandemic.

(On the subway)
(On the subway)
(In the agricultural greenhouse)
(In the agricultural greenhouse)
(At the auditee’s office)
(At the auditee’s office)
(On the airport runway)
(On the airport runway)
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