Module 4 - Introduction to Performance Audit_4B

Determining scope is fundamental to audit design and much of the audit plan follows once
this scope been established as illustrated below.
Select strategy
Select scope
Select analytical methods
and performance
measurements (criteria)
Select data to use
Determine data sources
and collection methods
Select methods for
validating data
Test fieldwork plan
Steps in Audit Design (based on Rauum and Morgan, 2009) 59
Audit methodology and audit criteria are part of this process and are considered below.
The auditor is naturally guided and constrained by considerations such as time, cost,
resources, expertise, professional standards, policies, and approved procedures. In general,
the time, skill, and resources needed to complete the audit should be made available, but
auditors must also operate efficiently.
In some cases, it may be possible to test every potential element covered by the audit
objectives exhaustively, but typically the frame of reference is selectively limited in terms of
the timeframe (by ignoring events occurring earlier or later than a selected period) and the
universe by defining a representative subset of people, activities, locations, and outputs on
which to base the investigation.
To help set the scope and determine what aspects of the universe to include, whether to
sample or investigate the entire universe, the following questions can be used.
Topic Questions
What? What specific questions or hypotheses are being examined?
What are the key processes relevant to your audit?
59
Rauum and Morgan, Performance Auditing: A Measurement Approach, The Internal Audit
Research Foundation, 2009.
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