Page 29 - 4. Pre-Course Reading-Training on Forestry Audit 2019

Chapter 3: Auditing Forest

How: Risks related to forest management are difficult to asses control systems are inadequate or have the potential to create
and complex, and sometimes there is no comprehensive data further risks.
available. If this happens, SAIs may use external sources to identify How: Relevant staff and senior officials of the forest
risks. These sources include academic papers, studies done management entity should be interviewed. During interviews,
by NGOs, interviews with relevant officials and representatives, the entity’s various controls systems and procedures could be
and information from the media. In addition, SAI may use the risk discussed in order to gain a better understating. Additionally,
table in Chapter 2 as a way of identifying possible risks.
sample-testing could also be undertaken to check whether the
systems and procedures are sufficiently effective and reliable.
Phase II: Understanding the forest management
entity’s efforts to mitigate risks
Phase IV: Choose audit topics and priorities
This is the most important and crucial stage. As with Part III,
What risk
the SAI’s capacity is very important when it comes to choosing
audit topics and priorities. The SAI needs to consider the
• Biodiversity and ecosystem loss
• Forest fires auditors’ capacity to answer questions about the audit and its
• Illegal logging findings, the level and nature of public attention surrounding
• Illegal use of land the subject, the amount of money involved, and the nature and
• Disaster extent of the impact that might result from the audit findings. 29
• Conflict How: SAIs could conduct interviews with government officials,
• Revenue loss analyze previous audit reports, and research on public opinion
• Unemployment regarding the topic and sub-topics to be audited.
• Social problems
• Decreased carbon storage
• Destruction on water management After Phase IV, the SAI is advised to refer to the stages in the
• Shortage of raw materials for industry design matrix in Appendix 3.

Specific issues
How
Where the stakeholder clearly specifies the topics and sub-
• Establish policies topics to be audited, the SAI may choose to omit the risk
• Enact legislation identification process and immediately conduct the audit as
• Forest biodiversity inventory requested. The phases of specific issues are described as
• Designate areas for permanent forest follows:
• Establish national forest service
• Designate annual allowable cut
(chapter II: Forest policy) • Phase I: Understanding stakeholders expectation.
This phase involves the SAI formulating the stakeholder’s
request into relevant topics and sub-topic. This includes
The forest management entity may already be undertaking determining specific risks that relate to the identified topics
efforts to resolve the various issues it faces. With this in mind, and sub-topics. It is also worth nothing that, sometimes,
the SAI should gain an understanding of the steps taken by the stakeholder requests are described in terms of areas of risk
management entity and other key players involved. rather than key areas of interest.
How: The SAI could get an understanding of the management
entity’s efforts to mitigate risks by reviewing legal regulations, •
Phase II: Aligning topic and sub-topic with the
standard operating procedures, policies, and instruments risk and vice versa. This phase is about establishing audit
set out by the government; and by interviewing some ‘key
players’. procedures. To do this, a SAI may wish to use the design audit
matrix described in Appendix 3.

Phase III: Evaluate and test the capacity of the Figure 3.2, Tables 3.1 and Table 3.2 all illustrate how a
management entity to mitigate risks
risk-based audit approach can be implemented. Figure
This phase is connected closely to Phase II. The SAI’s capacity 3.2 represents, in diagrammatic form, the general forest
is crucial when it comes to identifying risks and assess the management case study discussed in Table 3.2. Table 3.1
entity’s effort in mitigating those risks. Phase 3 should result provides a case as example of forest destruction caused by tin
in the SAI having an understanding of what the management mining activity on an island in Indonesia. The open of tin mining
entity has done to mitigate the risks, as well as information in this instance was done by the private sector and the local
on important topics and sub-topics, and whether the entity’s communities in the area. Forest sustainability was ignored.