Performance Auditing Success is All in the Design - Chapters Site
Performance Auditing Success is All in the Design - Chapters Site
Performance Auditing Success is All in the Design - Chapters Site
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Accord<strong>in</strong>g to Government <strong>Audit<strong>in</strong>g</strong> Standards (GAS 7.30-7.32), <strong>in</strong> plann<strong>in</strong>g an audit, auditors should<br />
assess r<strong>is</strong>ks of fraud occurr<strong>in</strong>g that are significant with<strong>in</strong> <strong>the</strong> context of audit objectives. When auditors<br />
identify r<strong>is</strong>ks, <strong>the</strong>y should design procedures to provide reasonable assurance of detect<strong>in</strong>g such fraud.<br />
Also, if <strong>in</strong>formation comes to <strong>the</strong> auditors’ attention that fraud may have occurred that <strong>is</strong> significant<br />
with<strong>in</strong> <strong>the</strong> context of <strong>the</strong> audit objectives, <strong>the</strong> auditors should extend <strong>the</strong> audit steps and procedures as<br />
necessary to (1) determ<strong>in</strong>e whe<strong>the</strong>r fraud has likely occurred and (2) if so, determ<strong>in</strong>e its effect on <strong>the</strong> audit<br />
f<strong>in</strong>d<strong>in</strong>gs.<br />
Accord<strong>in</strong>g to Government <strong>Audit<strong>in</strong>g</strong> Standards (GAS 7.34), if dur<strong>in</strong>g <strong>the</strong> course of <strong>the</strong> audit, auditors<br />
become aware of abuse that could be quantitatively or qualitatively significant to <strong>the</strong> program under audit,<br />
auditors should apply procedures specifically directed to ascerta<strong>in</strong> <strong>the</strong> potential affect on <strong>the</strong> program<br />
under audit with<strong>in</strong> <strong>the</strong> context of <strong>the</strong> audit objectives. Examples of abuse, depend<strong>in</strong>g on <strong>the</strong> facts and<br />
circumstances, <strong>in</strong>clude (GAS A.06):<br />
creat<strong>in</strong>g unneeded overtime;<br />
request<strong>in</strong>g staff to perform personal errands or work tasks for a superv<strong>is</strong>or or manager;<br />
<br />
<br />
m<strong>is</strong>us<strong>in</strong>g <strong>the</strong> officials position for personal ga<strong>in</strong>; and<br />
mak<strong>in</strong>g procurements or vendor selections that are contrary to ex<strong>is</strong>t<strong>in</strong>g policies or unnecessarily<br />
extravagant or expensive.<br />
Procedures for Coord<strong>in</strong>at<strong>in</strong>g with OCA’s Fraud Hotl<strong>in</strong>e<br />
In mak<strong>in</strong>g <strong>the</strong> fraud r<strong>is</strong>k assessment for <strong>the</strong> audit, auditors should determ<strong>in</strong>e if <strong>the</strong>re were Fraud Hotl<strong>in</strong>e<br />
compla<strong>in</strong>ts <strong>in</strong>volv<strong>in</strong>g any program area covered by <strong>the</strong> audit objectives. Substantiated Fraud Hotl<strong>in</strong>e<br />
compla<strong>in</strong>ts are publ<strong>is</strong>hed and <strong>the</strong> Auditor/Investigator can be consulted to determ<strong>in</strong>e if <strong>the</strong>re were<br />
potential systemic <strong>is</strong>sues that might bear on <strong>the</strong> Fraud r<strong>is</strong>k for those compla<strong>in</strong>ts that were closed with<br />
o<strong>the</strong>r conclusion than substantiated.<br />
C. Consider<strong>in</strong>g Whe<strong>the</strong>r Compliance with Laws, Regulations, or Prov<strong>is</strong>ions of Contracts and<br />
Grant Agreements Is Significant to <strong>Performance</strong> Audit Objectives<br />
Accord<strong>in</strong>g to Government <strong>Audit<strong>in</strong>g</strong> Standards (GAS 7.28), auditors should determ<strong>in</strong>e which laws,<br />
regulations, and prov<strong>is</strong>ions of contracts or grant agreements are significant with<strong>in</strong> <strong>the</strong> context of <strong>the</strong> audit<br />
objectives and assess <strong>the</strong> r<strong>is</strong>k that violations of those laws, regulations, and prov<strong>is</strong>ions or grant agreements<br />
could occur. Based on that r<strong>is</strong>k assessment, <strong>the</strong> auditors should design and perform procedures to provide<br />
reasonable assurance of detect<strong>in</strong>g <strong>in</strong>stances of violations of legal and regulatory requirements or<br />
violations of prov<strong>is</strong>ions of contracts or grant agreements that are significant with<strong>in</strong> <strong>the</strong> context of <strong>the</strong> audit<br />
objectives.<br />
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