Legal and Regulatory Framework of State Audit and Financial Control
This domain tests the legal architecture that gives Kazakhstan’s state auditors their mandate, powers, and boundaries. Expect questions on the Law on State Audit and Financial Control, the split between external and internal audit, and the position of the Accounts Committee.
Institutional map
- Law No. 392-V of 12 November 2015 “On State Audit and Financial Control” is the framework statute. It defines state audit, state financial control, subjects and objects, and audit types.
- The Accounts Committee for Control over Execution of the Republican Budget is the supreme audit institution. It is accountable to the President and reports to Parliament.
- External state audit at local level is performed by audit commissions of oblasts, cities of republican significance, and the capital; they are accountable to the relevant maslikhat.
- Internal state audit is performed by internal audit services of state bodies; the Ministry of Finance’s Committee for Internal State Audit is the authorized body.
Types and principles
- Financial audit assesses reliability of financial statements and compliance with legislation.
- Performance audit assesses economy, efficiency, and effectiveness.
- Principles include legality, independence, objectivity, competence, transparency, and responsibility.
Worked example
A regional health department uses a republican budget transfer to buy equipment. Because the funds are republican, the Accounts Committee may include the department in a republican-level audit. The regional audit commission could audit local budget funds, while the department’s internal audit service assesses internal control but does not issue an external audit opinion. The reasoning turns on the source of funds and the auditor’s mandate, not on where the entity sits.
Traps
- Treating state financial control inspections as identical to state audit.
- Assuming the Accounts Committee can audit a private company with no state funds or assets.
- Confusing the accountability of audit commissions with that of the Accounts Committee.