The first of the two functions of the Court of Auditors, according to the Organic Law, is the external, permanent and consumptive audit of financial-economic activity of the public sector. It is qualified as external because it is carried out by a body outside the audited subject, unlike the internal audit undertaken by the bodies of the public administration itself; it is permanent because it is continuously pursued in time; and consumptive, because of its final and definitive nature. The audit includes the set of actions that the Court of Auditors performs in accordance with its organic and organizational laws, to verify submission of the economic-financial activity of the public sector to the principles of legality, efficiency, effectiveness, economy and, where appropriate, to other good management principles. It is exercised in relation to the implementation of programs of public revenue and expenditure.
The audits define the objectives to be achieved and, based on them, the following types are often distinguished:
If different types of audit are combined, we can speak about regularity audit (that pursuing jointly the objectives of compliance and financial audits) or comprehensive audit (that covering all types of audit referred to above). There are also horizontal audits, which are those whose subjective area includes a plurality of entities within the same or different public sub-sector with common characteristics and the same objectives and time range for all of them, with the possibility of them being of any of the types of audits that have been just mentioned.
The law provides that those audit techniques that are suitable to the intended control can be used in audit procedures of singular entities. The reality is that the vast majority of audit actions are performed making use of this possibility, so that the audit usually involves an audit activity understood as systematic review, verification and evaluation of accounting records and control and management procedures following the technical standards established for this purpose.
The Plenum of the Court of Auditors approved at a meeting held on 23 December, 2013, the AUDITING STANDARDS OF THE COURT OF ACCOUNTS, which aim to serve as a tool for more effective and efficient fulfilment of the audit function of the Court of Auditors and,in short, to defend the public interest.
One of the main audit activities of the Court of Auditors is the examination and verification of the State General Account, which it proceeds to perform by delegation of the Spanish Parliament. Based on the results provided evidence examination and referral, the Plenum of the Court approves the declaration, which sets out in clear and concise opinion that finally deserves the General Account.
As required by law, the Court of Auditors shall state in the outcome of the audit how many offences, abuse or malpractice has observed, indicating the liability which, in its opinion, has been incurred and the actions to demand it. Also, it shall propose measures to be adopted, if necessary, to improve the economic and financial management of the public sector.
The processing of audit procedures is performed by the deponent department, implementing the annual audit programme. The text of the draft report is then submitted to the audited for claims and the resulting draft report shall be forwarded to the public prosecutor and to the legal service of the State to report in connection with their respective powers, and to all members of the Plenum to make the comments that they shall deem appropriate. The Audit Section shall discuss about the resulting text and shall submit it to the Plenum for approval. Once obtained, the result of the audit, usually the report is forwarded to the recipients: the Spanish Parliament, Legislative Assemblies of the Autonomous Regions or plenary sessions of local authorities, as appropriate. It is also forwarded to the National Government, the Governing Councils of the Autonomous Regions or the plenary sessions of local authorities, as appropriate, and incorporated into the website of the Court. Once the Joint Congress-Senate Committee for relations with the Court of Auditors is aware of the outcome of audit proceedings and after conducts its review, the resolutions adopted shall be published in the Official Spanish Gazette, together with the report.