TOP AUDITING ISSUES FOR 2013 - CCH

MODULE 1 — CHAPTER 3 — Performance Audits 35
Sufficiency. This subsection requires that auditors should determine whether
there is enough appropriate evidence to address audit objectives and to
support audit findings and conclusions.
While this determination is a matter of professional judgment, the Yellow
Book notes that:
The greater the audit risk, the greater the quality and quantity of evidence
required.
Stronger evidence may permit less evidence to be used.
A large volume of evidence does not compensate for its lack of reliability,
relevance, or validity.
Overall assessment of evidence. This subsection requires that auditors should:
Determine the overall sufficiency and appropriateness of evidence to
provide a reasonable basis for their findings and conclusions.
Perform and document an overall assessment of the collective evidence
used to support their findings and conclusions. This assessment includes
the results of any specific assessments conducted to conclude on the
reliability and validity of specific evidence.
Evaluate the expected significance of evidence to the audit’s objectives,
findings, conclusions, the available corroborating evidence, and the
audit risk.
Developing elements of a finding. This subsection contains the requirement
that auditors should plan and perform procedures to develop the elements
of a finding necessary to address the audit objectives. It also lists and explains
those elements.
Criteria. Criteria are discussed in the section/subsection entitled Planning/
Identifying audit criteria, above.
Condition. A condition is the situation as it exists. A condition is
determined and documented during the audit.
Cause. The cause identifies reasons or explanations for the condition,
and factors accounting for the differences between the criteria and the
condition. These factors may serve as a basis for recommendations or
corrective actions. They often include:
Poorly designed policies, procedures or criteria
Inconsistent, incorrect or incomplete implementation
Factors beyond the control of program management
Effect or potential effect. The effect is a clear and logical link that
establishes the impact or potential impact of the difference between the
criteria and the condition. It identifies the outcomes or consequences of
the condition, and may be used to demonstrate the need for corrective
action.