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How we audit

The Swedish National Audit Office audits central government and state-funded activities. Different methods are used depending on what is being audited. This may range from qualitative methods such as interviews and document studies, to quantitative methods such as data analysis and statistical calculations. An assessment of relevance, risk and materiality governs the focus of our audits.

We examine how the central government is attending to its responsibilities and describe what needs to be improved – knowledge gathered through audits. This knowledge is important for decision-makers in central government, but also for those who want to know how well the central government is functioning. At the Swedish National Audit Office, we have the resources, expertise and tools for performing those audits. Our independent position is enshrined in the Constitution. This means that others do not have control or influence over us. We determine our own activities and have the right to access any information we need.

We adhere to international standards in our auditing. These standards are essentially the same as those applied in auditing activities in the private sector. However, we have adapted the guidelines to Swedish central government conditions.

Auditing government agencies’ annual reports

To assess the contents of government agencies’ annual reports, we not only audit them; we also audit processes, IT systems and other aspects that affect the information in annual reports. This is a financial audit.

For each government agency, we have a dedicated team of auditors who audit throughout the year and, in March, finally assess the content of the annual report. If we find errors, we inform the government agency so that they can make improvements. The process is similar to that applied by auditors in private companies when auditing their annual accounts.

Financial auditing – step by step

Each year, the Swedish National Audit Office audits and assesses the content of approximately 230 central government agencies’ annual reports. Work proceeds throughout the year and includes several phases:

In our audit of a government agency’s annual report, we examine risks that could lead to material misstatements. Rather than examining everything, we assess whether any misstatement may affect financial decisions made by the Riksdag and the Government based on the annual report.

To identify the risks, we conduct a risk assessment and then plan what we need to audit over the course of the year. We inform the government agency of our audit plan and, in consultation, decide when the audit should be performed.

The government agencies’ annual reports are ready in February. We can begin by auditing the agency’s draft annual report. This gives us almost two months to assess whether the annual report accurately describes the activities. To manage this timeframe, we examine some aspects earlier in the year.

In our audit, we collect information and documentation about the risks we identified in our planning. So, although we focus on the annual report, the major task involves auditing flows of money, processes, IT systems and other elements that affect the risks of material misstatement in the annual report.

We conduct our auditing work both remotely and on site at the government agency. As part of our audit, we can

  • talk to people working at the government agency
  • access documentation from the government agency, such as documents and transaction files
  • analyse data to find correlations and deviations in large quantities of information
  • access the controls used by the government agency to ensure accurate accounting, for example reconciliation between different systems and verification to ensure that people have the correct permissions.

We continuously check our findings with the government agency

During the course of the financial audit of a government agency’s annual report, we continuously check the misstatements and errors we find with the agency’s relevant employees and management. To this end, we can meet those responsible or write an audit report to the government agency’s management.

This gives government agencies the opportunity to make changes and submit a high-quality annual report to the Government.

We present our assessment of the annual report in an auditor’s report

In the auditor’s report, we present how we have assessed the content of the annual report. Swedish government agencies generally have sound internal governance and control. This means that, in most cases, we consider that the annual report gives a true and fair presentation of the operations and finances. However, every year there are a number of instances where we do not consider this to be the case.

When we submit our auditor’s report to the Government with a copy to the government agency, we also inform the government agency verbally or in writing of our findings and our assessment. We meet representatives of the Government in the first half of the year to give a general overview of what we have noted in our audit of the government agencies for which each ministry is responsible.

What we include in our auditor’s reports

The language in our auditor’s reports is fairly technical. This is because we use the terms contained in the international standards for public-sector auditing. Auditor’s reports cover five areas. We assess and make statements about whether

  • the annual report has been prepared in accordance with prevailing rules
  • the annual report fairly describes the activities – whether it provides a true and fair presentation of the government agency’s financial performance, financing and financial position
  • the profit and loss account is linked to the other parts of the annual report to provide a sound overall picture
  • the management has used appropriations and revenue in the manner decided by the Riksdag
  • Government agencies comply with the Ordinance on Internal Control. This does not apply to all government agencies, but rather to those with the most extensive or complex activities.

Once they have been submitted to the Government and the respective government agencies, all auditor’s reports and audit reports are published on our website.

We want the audited government agencies to benefit from our findings and results and for the auditing process to proceed smoothly. This is why, every year, we follow up on how the government agencies perceive our auditing in a survey. We also perform follow-up on our auditing in other ways to improve our operations.

We audit the effectiveness and efficiency of central government

To find out how well central government activities are functioning, we need to examine the past. Using the Riksdag’s decisions as a starting point, we examine how the Government and government agencies have implemented these decisions and whether the end result was as initially intended. This may involve various measures as well as specific undertakings. This is a performance audit.

Performance audits often identify aspects that could have been done better. Going forward, such knowledge is important to learn from to ensure the best possible use of central government funds for the sake of everyone living and working in Sweden.

An audit of a central government initiative or a specific central government commitment takes about one year to conduct. We perform approximately 30 such audits per year.

Performance auditing – step by step

Under the law, we must:

  • focus on conditions that relate to the central government budget, the implementation and outcome of central government activities and commitments, but that may also relate to various central government initiatives in different areas
  • promote development that ensures that central government activities are conducted as well as possible in the public interest
  • focus auditing so that we can assess how the central government prudently manages and uses its resources and how successfully it meets its objectives.

When assessing audit proposals, we look at a weighted assessment of the relevance, materiality and added value of the issue, as well as timing and feasibility.

We monitor the world around us and analyse which areas of central government operations are important but risky. The Auditor General uses this material when deciding on the audits to be performed.

When initiating an audit, we produce a detailed structure in which we describe what we will audit and how. The detailed structure also includes a justification of the audit. The auditing process itself then begins.

We begin our audit by collecting information and data that is important for describing the activities and answering the questions that the audit concerns. Here, we use several different methods.

  • Document studies: We review decisions, cases and other documents at the audited government agency.
  • Interviews: We talk to people who are knowledgeable about the audited activities.
  • Surveys: We may send out surveys to relevant parties to collect their knowledge and opinions.
  • Field studies: Sometimes, we visit locations or operations to see matters in practice.
  • Statistical description: We describe activities and their results using existing data from various registers.
  • Data analysis: We analyse existing data and create new data to find patterns and connections.

When we have sufficient information, we compare how the activities function in reality with how they should or could function. We assure the quality of our work and results in various ways. For example, we ask the government agencies or organisations under audit to check that all facts are correct and our assessments are reasonable. It is important for us to be transparent with our audit subjects, even if our approach to the audit and the conclusions we draw are our own.

After we have conducted an audit, we produce a report in which we present our audit approach, our conclusions and recommendations. We communicate the results in several different ways to improve knowledge about central government activities and contribute to development.

  • Notification of date on the website: Once the Auditor General has approved the audit, we communicate this on our website.
  • Advance information to audited entities: Before we publish the audit, we offer a verbal presentation to the management of the audited government agencies.
  • Publication: We publish the audit report on our website and issue a press release to editorial offices.
  • Presentation to the Riksdag: We submit the audit report to the Riksdag. The parliamentary committee in the Riksdag responsible for the audited activities takes delivery of the report and processes it. The parliamentary committee often invites the Auditor General and the project group behind the report to hold a presentation and answer questions from the elected representatives.

When the Riksdag takes delivery of an audit report, the Government is asked to respond to the audit report in a letter within four months. In the letter, the Government must report on the measures it has taken or plans to take by reason of our audit report.

Once the Riksdag receives the government communication, it is considered by the relevant parliamentary committee. At this point, members of the Riksdag can submit proposals in the form of motions. The parliamentary committee then puts forth the decision it considers the Riksdag should make. Finally, the Riksdag makes its decision – to act or to close the matter to allow the Government and government agencies to address the conclusions and recommendations of the Swedish National Audit Office.

Once an audit has been completed, we send a survey to the government agencies we audited to find out how they experienced the audit. We also perform follow-up on our audit in other ways to improve our operations.

Updated: 15 Nov 2024
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