One of the indispensable prerequisites for good functioning of a modern democratic state is the existence of an independent audit system. In the Czech Republic, this function is performed by the Supreme Audit Office (SAO), the present concept of which is based on the experience of similar audit institutions in Europe.
The existence of the SAO has been enshrined in the Constitution of the Czech Republic, and in contrast to the past, its mandate is conceived in an entirely new way. The SAO performs its functions independently, being dependent neither on the legislative power (parliament) nor on the executive power (government). To the maximum degree, political influences on its work are eliminated. The SAO thus represents one of the specific elements of parliamentary democracy.
The Constitution of the Czech Republic, besides legislative, executive and judicial power and other constitutional elements, defines the status of the SAO as an independent body in a separate chapter, with provisions that
Also based on these principles is Act No. 166/1993 Coll. on the Supreme Audit Office (hereinafter only "Act"), which came into effect as of July 1, 1993.
On the basis of this law, the SAO audits the management of state property and financial resources collected under the law, e.g. for health and social insurance. It also audits the revenue and expenditure items of the state budget, e.g. payment of taxes by all liable persons, and their correct calculation and collection by the revenue authorities.
To ensure the highest possible degree of objectivity in considering audited matters and in decision-making, the collective principle has been adopted for the work of the Office. For this reason, decisions on the planning and results of the auditing activity of SAO are taken by its collective bodies: according to the importance and nature of audits, either the whole 17-member Board or three-to-five-member Senates. The Board consists of the President, the Vice President and 15 members of the Office. The members of the Office are elected by the Chamber of Deputies of the Parliament of the Czech Republic; their term of office lasts continuously until they attain the age of 65 years, and their status is comparable to the status of the members of parliament.
The institutional independence of SAO is supplemented by adequate financial independence. The sole institutions determining it are the Chamber of Deputies and the state budget.
The above concept of SAO meets the basic principles and recommendations of the Lima Declaration of INTOSAI. The "Lima Declaration of Guidelines on Auditing Precepts" is understood as a basic document summarizing principles of an independent audit activity; this document was adopted at the IX Congress of INTOSAI in Lima, Peru, in 1977. In the "Mexico Declaration on SAI Independence" 30 years later, the XIX Congress of INTOSAI (2007, Mexico) defined requirements on such independence of SAIs in more detailed terms and identified eight pillars for the independence of external government auditing.