Module 4 - Introduction to Performance Audit_4B

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Contracts or grant agreements. Benchmarks or performance indicators set by the SAI, the audited entities or other relevant entities or sectors. Prior periods’ performance. Criteria used in similar audits or by other SAIs. (Note: You will need to ensure these criteria are still valid.) 65 Objective Understandable Reliable Testable Relevant Audit criteria Complete Attributes of Audit Criteria (based on Performance Audit ISSAI Implementation Handbook) 66 Benchmarks can be used as a way of gauging accomplishments in comparison with recognized good practice. They are useful for identifying poor performance and for identifying solutions and driving improvements. The adequacy of performance is considered against a set of aspirational criteria. Benchmarks may be drawn from within the entity under review or from external sources. Rauum and Morgan describe a 10-step process for using benchmarks to inform a performance audit as illustrated below. 65 Performance Audit ISSAI Implementation Handbook, IDI, 2021. 66 See Performance Audit ISSAI Implementation Handbook, IDI, 2021. 41
Establish current performance: • Select audit subject • Select comparison entities or locations • Apply measurements for both subject and selected comparison (benchmark) Identify opportunities for improvement • Compare measurements of subject and benchmark • Estimate the effect • Discuss with management for possible causes Collect data on causes and solutions • Map key processes • Collect data on differences between subject and benchmark • Identify best practices and barriers • Test managementasserted causes Recommend improvements • Communicate findings and solicit comment • Identify potential solutions and make recommendations Process for Benchmarking Approach in Performance Audits 67 4B.6: Reflection What steps are followed to establish appropriate criteria for performance audits? How do these differ from similar steps for other kinds of audit engagements? What are the risks involved in selecting audit criteria and how can these be managed? 67 See Rauum and Morgan, Performance Auditing: A Measurement Approach, The Internal Audit Research Foundation, 2009. 42
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Module 4 - Introduction to Performance Audit_4B

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