This article was first published in the October 2017 international edition of Accounting and Business magazine.

ACCA’s report, Professional accountants – the future: 50 drivers of change in the public sector, which was published in late 2016, rightly indicates that ‘professional accountants are generally viewed as the ethical conscience of organisations and, as a result, they carry a particular responsibility for ensuring that trust in government organisations is maintained at all times’.

As the external auditor of the European Union’s (EU), the European Court of Auditors (ECA) – which celebrates its 40th anniversary this year – has a three-part mission:

  • to contribute to improving EU financial management
  • to promote accountability and transparency
  • to act as the independent guardian of the financial interests of EU citizens.

From its base in Luxembourg, the ECA warns of risks, provides assurance, indicates shortcomings and successes, and offers guidance to EU policymakers and legislators on how to improve the management of EU policies and programmes and ensure that Europe’s citizens know how their money is being spent.

Last month the ECA hosted an ACCA event entitled ‘Bringing governments closer to citizens and businesses in a digital age through ethics and trust’, which explored two themes: digital transformation – challenges and opportunities, and ethics, integrity and accountability of the public sector.

These themes are fundamental elements of the ECA’s 2018–2020 strategy, entitled ‘Fostering trust through independent audit’. The public sector and its auditors, including the EU and the ECA, face legitimate questions. The ECA is well placed to address the challenges and opportunities of EU governance and the appropriate spending of EU funds and therefore, through independent audit, to help EU citizens decide if they can trust EU institutions to deliver results for them.

Transparency is key

While the public sector differs from one country to another, a common aspiration among all member states is to serve the community and protect the public interest. The aims and consequences of public sector actions are driven by circumstances, resources and (political) choices. As such, ethics is at the root of trust in the public sector. Transparency and full accountability are key elements in ensuring ethical behaviour, providing options for the wider public to uncover possible unethical behaviour.

As the ethical conscience of organisations, professional accountants and the ECA as auditors should make it their mission to maintain core ethical values. In its 2018–2020 strategy the ECA emphasises its core values of accountability, transparency, professionalism, integrity, impartiality and responsiveness.

In recent years the ECA has vigilantly overseen how EU rules and procedures on compliance audit have been applied in EU spending. However, following rules is not enough. Spending taxpayers’ money should benefit the community as a whole, and value for money is as important, if not more important, a consideration as oversight.

So the ECA has steadily increased its work reporting on ‘EU added value’, through its performance audit work. In coming years we will strengthen our annual reporting on performance and on information on EU action in member states and regions.

In applying its 2018–2020 strategy, the ECA plans to focus further on assessing the performance of EU action by refining its approach in the following ways:

  • improving our assessment of added value
  • taking a broader view of EU action
  • providing rapid answers to pressing and targeted questions
  • better comparison of methods and results
  • increasing the impact of its recommendations on achieving improvements
  • providing insight into EU action against fraud and corruption.

Our scrutiny of EU action can increase trust in the EU only if we manage to communicate our findings and recommendations clearly. So in our most recent annual report, published last month, we have used less technical language where possible and a more visual presentation.

EC governance

In 2016 the ECA published a special report on governance at the European Commission (EC) (SR 27/2016). This also addressed the follow-up of internal and external audit work and recommended that the EC should establish an audit committee with a majority of independent, external members and expand its mandate to cover risk management, financial reporting and the work and results of ex post verification units and audit directorates. We will continue to address high-level governance and ethical topics, as for example in planned work on conflict of interest and ethics in EU institutions.

Ethics is at the basis of public sector work, including that of independent auditors. As auditors we help citizens by providing assurance on information they receive. The ECA’s 2018–20200 strategy aims to foster trust through independent audit. ACCA’s reports and events help us to make this happen. 

Lazaros S Lazarou FCCA is a member of the European Court of Auditors