A pragmatic approach of the state audit engagements through an analysis of the audited municipalities' revenues and expenditures in the Republic of North Macedonia

Abstract

The state audit is a crucial mechanism in controlling the spending of public money, hence the synonym for state audit is "guardian of public money". The Lima Declaration, and later the Mexico Declaration, began to regulate state audit a profession. The International Organization of Supreme Audit Institutions (INTOSAI) standards indicate that state audit is regulated by the highest legal act of a country (the Constitution). In the Republic of North Macedonia, the state audit is regulated by the Law on State Audit, which governs its competencies and its mandate to audit public sector entities. The activities related to the state audit in the Republic of North Macedonia are performed by the State Audit Office (SAO), as the Supreme Audit Institution (SAI). The SAO has been a member of the INTOSAI since 2001 and of the European Organization of Supreme Audit Institutions (EUROSAI) since 2002. One of the most important entities covered by the state audit in the Republic of North Macedonia are the units of local self-government (hereinafter referred to as municipalities). This research focuses on the audits of the municipalities in the Republic of North Macedonia within 10 years, in terms of the volume of audited revenues and expenditures in the municipalities. By analyzing the data obtained from the annual reports of the performed audits and the operation of the SAO (2010-2019), this research investigates the impact of the state audit engagements on the audited revenues and expenditures of the Macedonian municipalities For the analysis of the domestic practice, data was collected and extracted from 10 annual reports of the performed audits and the operation of the SAO (2010-2019). All the results of the research will be summarized in a conclusion that should indicate whether the audit of the municipalities in the Republic of North Macedonia noticed progress through the past 10 years with a particular emphasis on the trend and impact of conducted audit engagements.