Module 4 - Introduction to Performance Audit_4B

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Identify cause. This is illustrated in the diagram below: Criteria Recommendation Finding Condition Effect Cause These key terms may be defined as follows: Elements of Audit Findings Criteria – what should be found from gathering and processing information about the topic area. Condition – what was found. Effect – the consequences of the condition (likelihood and impacts of resulting risks). Cause – what gave rise to the condition discovered. Based on their analysis, auditors can communicate their findings to intended users. Finding – actual performance (economy, effectiveness, and efficiency) with reference to the criteria, condition, effect, and cause. Reported findings may be limited to deficiency or performance below the desired level as defined by the criteria. In addition, auditors may also provide recommendations for addressing weaknesses and making improvements. Information gathering starts at the earliest stages of planning, including the use of any prestudy, and continues throughout the engagement. The processes described below also inform the performing stages, beginning in earnest after the planning and preparation. All data used needs to be checked for sufficiency, relevance, and reliability. Steps for confirming 37
eliability may include corroboration, verification, validation, and obtaining additional information. 61 There are different ways of gathering information. Substantive procedures defined by audit standards (e.g., ISA 330) 62 generally include the following: Inspection. Observation. External confirmation. Recalculation. Reperformance. Analytical procedures (including the use of computer assisted audit tools CAATs). Inquiry. The IDI handbook provides an alternative and broader way of considering data-gathering methods as illustrated below. Direct observations and inspection Surveys Site visits File reviews and structured observations Small group methods (e.g., focus groups) Document collection Secondary data Interview Data- Gathering Case studies Data-Gathering Methods for Performance Audits (based on Performance Audit ISSAI Implementation Handbook) 63 Regardless of the methods used, the auditor must ensure evidence is sufficient, reliable, and relevant. Evidence gathering is considered in more detail in section 4C.1 as a major part of fieldwork. 61 See Rauum and Morgan, Performance Auditing: A Measurement Approach, The Internal Audit Research Foundation, 2009. 62 See ISA 330, The Auditor’s Response to Assessed Risks, IFAC, 2013. 63 See Performance Audit ISSAI Implementation Handbook, IDI, 2021. 38
Page 1 and 2: 4B. Planning a Performance Audit En
Page 3 and 4: General overviews Consideration of
Page 5 and 6: Understand interests and priorities
Page 7 and 8: Internal auditors must develop and
Page 9 and 10: How does the planning process for a
Page 11 and 12: 4B.4 Audit Scope It is necessary to
Page 13: What is the subject matter that wil
Page 17 and 18: e) Objective audit criteria are fre
Page 19: Establish current performance: •

Module 4 - Introduction to Performance Audit_4B

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