Office for Auditing of the Financial Operations of the Institutions of BiH was established according to the Law on Auditing of Financial Operations of Institutions of BiH that was adopted in October 1999. Some Audit Laws from developed European countries were taken as a model in preparation od BiH Audit Law.

According to the provisions of BiH Audit Law, Audit Office is an independent institution. This is in line with INTOSAI standards (International Standards of Supreme Audit Institutions). After they were published in Official Gazettes of BiH and Entities (State and Entities level), these Standards became part of our legal system. The Audit Office is independent from other government authorities, and is defined as an expert body more linked to Parliamentary Assembly.

The Law regulates establishing of Audit Office, its main functions and powers of Auditor-General, powers regarding information gathering, making reports and manner and time of submitting of these reports, as well as overall relation toward Parliamentary Assembly.