The ECA is the external auditor of the EU. Its work is focused on the EU’s financial reporting, as well as on the implementation of its budget and policies. In line with other supreme audit institutions the ECA carries out three different types of audit: financial, compliance and performance.
Types of audit
Each audit type has different objectives and addresses different questions. Individual audits can involve one or a combination of audit types.
Typical audit questions: Are the financial statements complete and accurate (reliable)? Do they present fairly the financial position, results and cash flow for the year, in accordance with the applicable financial reporting rules?
Typical audit questions: Are EU income and expenditure transactions correctly calculated and do they comply with the relevant legal and regulatory framework requirements?
Typical audit questions: Do the EU funds provide value for money? Have the funds used been kept to a minimum (economy)? Have the results been achieved with the fewest possible resources (efficiency)? Have spending or policy objectives been met (effectiveness)?
Stages of the audit process
The ECA’s audits are complex and technical, and require significant resources to complete. Audit topics are selected based on risk, public interest and likely impact and are aimed at maximising the use of the ECA’s resources. The main steps of the audit process are:
Multiannual and annual programming: determining audit priorities based on risk and policy analysis, and the ECA’s overall strategic direction.
Preliminary study: assessing the feasibility of an audit task proposal and its likely impact.
Audit planning memorandum: setting out the detailed audit steps to ensure the process is efficient and effective.
- Audit field work: obtaining direct audit evidence, on the spot in the EU’s institutions, agencies and decentralised bodies, national administrations and other recipients of EU funds.
Clearance procedure with the auditee: checking the facts with the audited body and confirming the quality of the findings.
Publication of audit report: setting out the audit findings, conclusions and recommendations, together with the auditee(s) response.
Follow-up: after two or three years, checking the extent to which recommendations have been implemented.
The ECA’s audit reports set out clearly and concisely its findings, conclusions and recommendations, together with the replies of the audited bodies. They help ensure that the transparency of the audit process makes an important contribution to the EU accountability chain. The ECA’s reports are used by the European Parliament and Council within the annual ‘discharge’ process to hold to account those responsible for managing the EU budget.
Helping to fight fraud against the EU budget
The European Anti-Fraud Office (OLAF) is responsible for the EU’s fight against fraud and protecting its financial interests. In accordance with its Decision No 43-2017 (which lays down arrangements for cooperation with OLAF), the ECA forwards to OLAF any suspicion of fraud, corruption or other illegal activity affecting the EU's financial interests. Potential frauds may be identified in the course of the ECA’s audit work, or be communicated to the ECA by third parties.