Module 4 - Introduction to Performance Audit_4A

More documents

Recommendations

Info

The first and third of these aspects are consistent with the focus and purpose of performance auditing. However, performance auditing considers a broad range of subject matter and can contribute to all aspects of the mission of internal auditing. For example: Operational information relates closely to efficiency and effectiveness. Safeguarding of assets has a strong link with the principle of economy. Compliance with laws, regulations, policies, and other authorities is often a key consideration in performance auditing. The following table summarizes the main similarities and differences between the performance audits conducted by internal auditors and SAI external auditors. Primary Characteristics Relevant professional standards Relevant competencies Mandate Primary accountability Purpose of performance auditing Type of audit Scope Methodology Criteria Performance Auditing Internal Audit External Audit (SAI) Mandatory and recommended General and specific principles, elements of The IIA’s standards, and guidance of International Professional INTOSAI’s International Practices Framework (IPPF) Framework of Professional applicable to all audits. Pronouncements (IFPP) comprising principles (INTOSAI- P), standards (ISSAIs) and guidance (GUIDs). Defined by The IIA’s Internal Audit Competency Framework. Defined by INTOSAI’s Competency Framework for Public Sector Audit Professionals at Supreme Audit Institutions. Defined in the Internal Audit Defined in legislation. Charter and/or legislation. To the governing body and To parliament and the public. senior leadership of an individual entity or group of entities. To determine whether public funds have been used with economy, effectiveness, and efficiency, and identify opportunities for improvement. Assurance. 6 While performance audits are assurance engagements, auditors may be asked to provide advisory services. This is formally within the mandate of internal auditors and is increasingly regarded as part of the role of external auditors as well. Activities, programs, processes, and systems of an individual entity or group of entities. Determined by the auditor. Activities, programs, processes, systems, and entities across the public sector. Determined by the auditor, supported by standards, guidance, policies, manuals, and handbooks. Determined by the auditor, supported by standards, guidance, policies, manuals, and handbooks. 6 Referred to as a “direct reporting engagement” by external auditors as the topic, scope, objectives, and criteria are selected and defined by the auditor. 8
Primary similarities and differences between performance audits of internal and external auditors For SAIs national standards may also apply or substitute for the ISSAIs. Other external audit providers will apply standards according to statutory requirements. Standards for Performance Auditing First and foremost, performance auditing is a form of auditing and therefore the general requirements for managing and executing all such engagements apply. Standards for Performance Auditing – External Audit For external auditors in the public sector, this means the INTOSAI Founding Principles (INTOSAI-P 1-99), Fundamental Principles (ISSAI 100-129), and Organizational Requirements (ISSAI 130-199) apply as they do for all external audits. In addition, specific standards for Performance Audit (ISSAI 300-399 and 3000-3899) also apply. ISSAI also provides supplementary guidance (GUID 3900-3999) to support implementation. Likewise, the “cross-cutting competencies” defined in the INTOSAI competency framework are applicable to all engagements and are arranged in five clusters: CC1: An audit professional leads by example. CC2: An audit professional engages effectively with stakeholders. CC3: An audit professional behaves in a professional manner. CC4: An audit professional contributes to the value and benefits of the SAI. CC5: Additional reflection for SAIs with Jurisdictional Responsibilities. 7 There are also specific competencies defined for each major type of audit, including the following clusters for performance auditing: PAC1: An audit professional adds value by conducting ISSAI-compliant performance audits. PAC2: An audit professional demonstrates an understanding of context, environment, and entity in a performance audit. PAC3: An audit professional assesses and manages risk in a performance audit. PAC4: An audit professional performs and documents performance audit procedures as per ISSAIs. PAC5: An audit professional effectively communicates and follows up on performance audit results. 8 Standards for Performance Auditing – Internal Audit The IIA does not provide separate standards for performance auditing and very limited official guidance. Practitioners need to adhere to The IIA’s International Practices Professional Framework (IPPF) applicable to all assurance and advisory engagements. This entails performance audits need to be consistent with the following: 7 Competency Framework for Public Sector Audit Professionals at Supreme Audit Institutions, INTOSAI, 2019. 8 Competency Framework for Public Sector Audit Professionals at Supreme Audit Institutions, INTOSAI, 2019. 9
Page 1 and 2: Module 4: Introduction to Performan
Page 3 and 4: Module 4: Introduction to Performan
Page 5 and 6: competencies, knowledge acquired by
Page 7: activities, especially those of low
Page 11 and 12: Non-mandatory but recommended guida
Page 13 and 14: The IPPF does not prescribe specifi
Page 15 and 16: In describing performance auditing,
Page 17 and 18: The other Es are used to illustrate
Page 19 and 20: 52) The auditor shall actively mana
Page 21 and 22: Choosing quality assurance steps th
Page 23: c) require that those performing th

Module 4 - Introduction to Performance Audit_4A

Create successful ePaper yourself

Delete template?

Save as template?