Test Your Knowledge of the History of the National Audit Office and the Comptrol...

History of the National Audit Office

• The National Audit Office (NAO) was established in its present form in 1983, but a public audit function for central government in the UK goes back to the 1860s.
• William Ewart Gladstone initiated major reforms in the 1860s of public finance and Parliamentary accountability, which resulted in the Comptroller and Auditor General (C&AG) being established.
• The C&AG was given two main functions: to authorise the issue of public money to the government from the Bank of England and to audit the accounts of all government departments and report to Parliament accordingly.
• The Exchequer and Audit Departments Act 1866 established a cycle of accountability for public funds, with the House of Commons authorising expenditure, the C&AG controlling the issue of funds, accounts produced by departments and audited by the C&AG, and the results of the C&AG’s investigations considered by a dedicated parliamentary committee.
• The Exchequer and Audit Departments Act 1921 allowed the C&AG to rely on departmental systems of control and report to Parliament that money had been spent in accordance with its wishes.
• The National Audit Act 1983 modernised public audit and gave the C&AG specific power to report to Parliament at his own discretion on the value for money achieved by government departments, and more robust arrangements were put in place to ensure the independence of public auditors from government.
• The Government Resources and Accounts Act 2000 introduced resource-based accounting and budgeting for department accounts, and the preparation and audit of consolidated accounts for the whole public sector (Whole of Government Accounts) to be audited by the C&AG.
• The Companies Act 2006 allowed the C&AG to compete for the audit of public bodies established as companies.
• The Budget Responsibility and National Audit Act 2011 established the NAO as a corporate body led by a Board consisting of four executive members and five non-executive members, and the C&AG has a fixed term of ten years instead of an unlimited tenure.
• The Local Audit and Accountability Act 2014 abolished the Audit Commission and introduced new arrangements for the audit of local public bodies, with the C&AG preparing the Code of Audit Practice.
• Parliamentary control and scrutiny of public spending was weak until the 1860s, and concerns were expressed from the 1960s onwards that the scope of public audit needed to be modernised to reflect significant changes in the role of government over the course of the twentieth century.
• Lord Sharman’s review of audit and accountability for central government, “Holding to Account”, published in 2001, resulted in the government accepting the principle that the C&AG should audit all Non-Departmental Public Bodies, and that the audit appointment should be set out in statute.

Test your knowledge of the history of the National Audit Office, the Comptroller and Auditor General and their role in public finance and parliamentary accountability in the UK. From the establishment of public audit functions in the 1860s to modernization efforts in the 21st century, this quiz will explore the key moments in the history of the NAO. See how well you know the development of public audit and the significant changes that have been made over the years to ensure the independence of public auditors