Internal Audit Law

Original Language Title: Iekšējā audita likums

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Read the untranslated law here: https://www.vestnesis.lv/ta/id/205906

The Saeima has adopted and the President promulgated the following laws: the internal audit law chapter I General provisions article 1. The terms used in the law, the law is applied in the following terms: 1) authority — the Prime Minister directly subordinate institution, the institution shall give to the Minister, other than the Ministry, as well as the derived public person, except municipalities;
2) the internal control system, risk management, control and management measures, for which the establishment is responsible for the State Secretary of the Ministry or the head of the authority, and which requires a permanent, cost-effective, efficient and appropriate ministries or institutions;
internal audit — 3) internal auditor's independent, objective activity, the result of which is provided in the auditor's opinion or advice, in order to improve the internal control system in the Ministry and authority.
2. article. The purpose of the law the purpose of the law is to define the legal framework for the internal audit system, operation and coordination of the Ministry and authority, including the internal auditors the responsibilities, rights and conditions of independence and impartiality.
3. article. The operation of the law (1) of the Act applies to ministries and institutions. This law, ninth paragraph of article 5 shall apply to municipalities and local authorities. Article 8 of this law shall apply to municipalities, local authorities and private individuals, which have received European Union programmes and projects funded or foreign financial assistance.
(2) to the international organization resources (allocation) the appropriateness of the use of control this law applies if it is specified in the relevant international treaties.
4. article. Internal control system internal control system, the monitoring and improvement provides the Secretary of State or the head of the authority, in accordance with the law of public administration facilities.
Chapter II internal audit system, and coordination article 5. Internal audit system (1) the Prime Minister shall determine the internal audit system of his subordinate institutions.
(2) the Minister shall determine the internal audit system of his subordinate institutions. On internal audit system of State security institution acting Minister, overseeing the national security agency.
(3) the derived public persons according to law is an independent statutory functions, internal audit system shall be laid down in the Authority's leader.
(4) For certain internal audit system and the internal audit unit is responsible for the creation of a Secretary of State or the head of the authority.
(5) the internal audit unit shall comprise the Prime Minister directly subordinate institutions and ministries as well as the third subparagraph by those institutions.
(6) excluding the institutions directly subordinate to the Prime Minister, the internal audit department consists in cases stipulated by the European Union or foreign financial assistance in the field of regulatory legal acts.
(7) institutions, not mentioned in this article, the fifth and sixth subparagraphs, the internal audit department created the need to coordinate with the Finance Minister, the evaluation of the following criteria: 1) the authority and functions provided in public;
2) the institutions of the European Union, membership in international organizations or foreign financial assistance;
3) National Authority budget and the management of the transferred material goods;
4) with the activities of the authority related to the risk of impact on the national budget losses;
5) body.
(8) the internal audit department reports directly to the Secretary of State or the head of the authority.
(9) the local Government shall determine the internal audit system and methodology of municipalities and local authorities.
6. article. On the establishment of the internal audit Department officers duties (1) the Secretary of State or the head of the authority: 1) determines the order in which to perform the internal audit and the internal audit of the implementation of the recommendations of the relevant Ministry or supervisory authority in accordance with the internal audit of the regulatory laws;
2) approved by the internal audit department's strategic plan and annual plan;
3) decide on the internal audit report on implementation of recommendations;
4) submitted to the Finance Ministry for comparative testing of the necessary information and documents;
5) inform the Finance Ministry of the internal audit unit manager's appointment or dismissal;
6) send law enforcement agencies information on internal audit findings during the case, which arose suspicion that they are related to the unlawful activity;
7) sends national office evaluation information on internal audit at the time of the findings, which affects the functioning of the public administration in General.
(2) the Secretary of State and the Prime Minister directly subordinate institutions leader: 1) provides the relevant ministries and institutions subordinated to the Minister or the Prime Minister directly subordinate institutions ' internal audit unit plans, as well as its annual activity report timely submission to the Ministry of finance and State control;
2) two weeks of Ministry of Finance informed of the internal audit system and changes to the internal audit system;
3) shall inform the relevant Minister or Prime Minister, of the internal audit system performance.
7. article. Internal audit department the tasks of (1) the internal audit unit: 1) Ministry or institution's internal control system;
2) based on the risk assessment, the internal audit system, as well as quality management system internal audit;
3) gives the Secretary of State or the head of the authority, which shall include an assessment of: (a)) of the effectiveness of internal control systems and compliance with the objectives of the Ministry or authority, b) financial records and other information reliability and sufficiency, c) or departments of the Ministry is complying with laws and regulations, defined functions and approved action plans, d) resource use efficiency, e) adequacy of control in the use of resources and resource protection from injury;
4) gives authority to the Secretary of State or the driver recommendations for needed improvements;
5) internal audit carried out monitoring of implementation of the recommendations;
6) provide advice to promote the Ministry or the attainment of the objectives of the institution;
7) coordinates the internal and external auditors on cooperation and exchange of information;
8) determines the internal auditor training needs;
9) provides internal audit-related work performance and quality monitoring at all stages of internal audit;
10) provides the national control and external auditing of the auditor monitoring of implementation of the recommendations of the Ministry or the authority.
(2) the cabinet shall determine the arrangements for the internal audit.
8. article. The European Union's programmes and projects funded or foreign financial assistance, internal audit (1) the European Union is wholly or partially of programmes and projects funded or foreign financial assistance, internal audit, including the municipalities and local institutions as well as individuals who have received the European Union's programmes and projects funded or foreign financial assistance funds, the Ministry or authority carried out according to the European Union is wholly or partially of programmes and projects funded or foreign financial assistance in the management of regulatory legislation.
(2) the Ministry of Finance carries out internal audits in the Department or Office which according to the legislation of the European Union is engaged wholly or partially of programmes and projects funded or foreign financial assistance in the implementation of the management function, including municipalities and local institutions as well as individuals who have received the European Union's programmes and projects funded or foreign financial assistance.
9. article. Internal audit Department (1) independence of the internal audit department is independent of the other ministries or departments of the authority in the planning of its activities, the internal audit and reporting on performance.
(2) the internal auditor shall not engage in any Ministry or authority directly in the exercise of its functions, the European Union fully or partially funded programmes and projects or foreign financial assistance, in the implementation of individual projects or programmes, as well as the internal control system. Internal auditor the following functions may participate in an advisory capacity.
10. article. Internal audit (1) the coordination of the Ministry of finance is responsible for the coordination of internal audit internal audit and long-term development planning.
(2) the coordination of the Ministry of finance, internal audit, have the following tasks: 1) prepare and submit to the Cabinet and State control of aggregate annual report on internal audit activities of the ministries and departments;
2) to coordinate the internal auditor training and professional qualifications;
3) ministries and institutions provide consultative assistance for internal audit;
4) not less frequently than once every five years to take the ministries and institutions created internal audit departments of comparative testing;

5) to monitor the internal auditor certification system;
6) to develop internal audit methodology guidelines.
(3) the cabinet shall determine the internal auditor certification procedure.
(4) the cabinet shall determine the internal audit departments of comparative tests.
Chapter III internal auditor article 11. The internal auditor's appointment (recruitment) and the release from the post (dismissal) (1) the internal auditor shall be appointed and removed from Office, recruited or dismissed from the job the Secretary of State or the head of the authority, on the basis of civil law, this Act and other legislation.
(2) enter into civil or labour relations, in order to fulfil the duties of the internal auditor, the person who can meet the demands of the applicant official post minimum requirements.
(3) the national civil service or employment relationship to the internal auditor shall expire: 1) civil law or labour law cases;
2) for the negligent exercise of or about the shameful offence (violation of ethical principles), which is incompatible with the status of Auditors.
12. article. The duties of the internal auditor (1) Internal auditor has a duty to regularly supplement their knowledge and develop professional skills. The internal audit department and the Secretary of State or the head of the authority contributes to the internal auditor's qualifications.
(2) the internal auditor in the performance of official duties, is responsible for the acts or omissions of its legality. If the auditor of doubt about the legality of the task, his duty is to refuse to fulfil this task in writing informing their officials that made the task, as well as the next highest officials.
(3) the internal auditor shall operate in such internal auditor ethics principles: 1) honesty. Internal auditor carries out its work fairly, with due diligence and responsibility, the Ministry or the Authority's internal ethical principles, not engaging in practices that discredit the profession of the internal auditor or internal audit, Ministry or authorities respect the ethical objectives and contribute to their achievement;
2) impartiality. Internal auditor during the audit examined all the circumstances and evidence, not of the same without intercommunication, not from other people's interests, and the audit report reveals all the essential facts about the test;
3) privacy. Internal auditor does not use the audit or information obtained in the course of consultations, in a manner that would undermine the objectives of the Ministry or the authority. Audit or consulting information obtained in the course of the third person gets only the internal auditor with the Secretary of State or the head of the Authority's permission;
4) competence. Internal auditor internal audit and advice in the use of their knowledge, skills and experience.
13. article. Internal auditor Internal auditor rights have the right to request the concerned Ministry or authority documents and get to know them as well as to the financial resources, premises and other material values, get explanations and copies of documents from the Ministry or the staff of the body with the internal audit matters.
14. article. Restrictions on the work of the internal auditor (1) the internal auditor may not be at least a year to audit the functions which he made before the Ministry or the authority.
(2) the internal auditor shall report in writing to the internal audit unit manager, but internal audit unit manager — the Secretary of State or the head of the authority for each situation in which are or could lead to a conflict of interest.
Chapter IV internal audit Council article 15. Internal audit Council Cabinet after Finance Minister approves the recommendation of the internal audit Charter and the establishment of the Council.
16. article. Internal audit the internal audit, the aim of the Council the Council's objective is to promote the quality of internal audit, the internal audit policy and implementation methodology and development ministries and institutions.
Transitional provisions 1. With the entry into force of this law shall lapse at the internal audit law (Republic of Latvia Saeima and the Cabinet of Ministers rapporteur, 2002, nr. 24; 2006, 7 no).
2. the Cabinet of Ministers to the 2010 October 1 issue in this statutory law on internal audit.
3. the Cabinet of Ministers Act into force, but no longer than up to 2010 October 1 the following Cabinet of Ministers regulations, instructions and orders: 1) Cabinet June 10, 2003 regulations No 306 "the order in which the institution is made in the internal audit";
2) Cabinet June 10, 2003, the provisions of no. 307 "internal auditor certification procedure";
3) Cabinet of 19 august 2003, the provisions of no. 466 "provisions on the system of internal control requirements";
4) the Cabinet of Ministers on 16 January 2007 the Regulation No. 55 "internal audit departments of comparative tests, the order";
5) Cabinet of Ministers on 24 April 2007, instruction No. 8 "internal audit methodology";
6) the Cabinet of Ministers of 21 April 2008 instruction No. 4 of the European Union fully or partially funded programmes and projects internal audit methodology ";
7) the Cabinet of Ministers of 11 December 2008 order No. 791 "on the internal audit of the Council".
4. Article 5 of this law in the fifth, sixth and seventh subparagraph shall enter into force on 1 June 2010.
The Parliament adopted the law on 11 February 2010.
President Valdis Zatlers in Riga V 2010 on March 2.