Performance Auditing

A Measurement Approach
2. Auflage 2009
ISBN: 978-0-89413-660-3
Verlag: The Institute of Internal Auditors

Buch, Englisch, 416 Seiten

In this valuable resource, authors Raaum and Morgan present original performance audit concepts and practice aids as well as those being applied in leading audit organizations. While the discussion is focused on performance audits in governmental environments, the content is applicable to auditing in any private sector organization or public sector agency.

Developed for the practitioner and trainer, Performance Auditing: A Measurement Approach, 2nd Edition, emphasizes the use of measurement and comparison in performance assessment. It provides auditors with practical guidance for conducting performance audits in accordance with the Government Auditing Standards. It also includes guidance for passing the Certified Government Auditing Professional (CGAP) exam.

This unique publication provides practical, in-depth guidance that applies to practitioners at every level and is perfect for use as a guide in planning performance audit assignments, doing fieldwork, and writing reports. The easy-to-follow structure of the individual chapters makes this book ready for use in a training course or as reference material.

Performance Auditing: A Measurement Approach, 2nd Edition
Ronell Rauum and Steve Morgan
© 2009 The IIA Research Foundation

Autoren/Hrsg.

Raaum, Ronell B.

Morgan, Stephen L.

Fachgebiete

• Wirtschaftswissenschaften Betriebswirtschaft Unternehmensfinanzen Controlling, Wirtschaftsprüfung, Revision

Inhaltsverzeichnis

About the Authors
Acknowledgments
Preface
BACKGROUND
Chapter 1: The Auditor’s Role in the Information Business
Auditors Enhance the Value of Existing Information
Auditors Develop New Information
Providing Information on Compliance and Controls
Auditors’ Responsibilities and Customers
Summary
Chapter 2: Classes of Auditing and Types of Performance Audits
Two Classes of Auditing: Verification and Information Development
Audit Classifications Prescribed in Auditing Standards
Service Delivery Model Provides a Means for Classifying Performance Audits
Model’s Four Dimensions — Inputs, Processes, Outputs, and Outcomes
Safeguarding as It Relates to the Model
Other Models That Enhance This Model
Description of Performance Aspects within Each Model Dimension
Controls Are an Integral Element of the Model
Lessons from the Model
Summary
BASICS OF PERFORMANCE AUDITING
Chapter 3: Audit Findings
The Finding Concept
Traditional and Impact Findings
Traditional Findings — the Elements
Traditional Findings — Applying the Elements
Traditional Findings — May Contain Fewer Than Four Elements
Traditional Findings — Results and Process
Traditional Results Findings — Applying the Elements
Traditional Process Findings — Applying the Elements
Elements of Impact Findings
Impact Findings Can Become Traditional Findings
Impact Finding Concept Applied In Traditional Findings
Conclusions Added to Traditional and Impact Findings
Findings About the Future
Findings Can Be Positive
Traditional Finding Concept Embodies Management Control
Application of Finding Elements to Example Findings
Summary
Chapter 4: Evidence and Audit Documentation
The Importance of Evidence
Types of Evidence
Types of Evidence Cited In Auditing Standards
Physical Evidence
Documentary Evidence
Testimonial Evidence
Analytical Evidence
Fact and Views
Quantitative and Qualitative Evidence
Expert Opinion
Circumstantial Evidence
Conclusive Evidence
Audit versus Legal and Inspection Evidence
Evidence Sources
Evidence Tests
Relevance Test
Validity and Reliability Tests
Sufficiency Test
Audit Documentation — Repository for Evidence
Summary
THE AUDIT PROCESS
Chapter 5: Audit Selection — In Annual Planning
Selecting What to Audit
Selecting Audit Subjects and Issues in Annual Planning
Selecting Subjects and Issues Using Risk Assessment
Applying the Risk Assessment Steps in Audit Selection
Summary
Chapter 6: Preliminary Survey: First Stage in Audit Project Planning
Why Conduct a Preliminary Survey?
Survey End Results
Survey Scope and Time Requirements Will Vary
Survey End Result — Identify Issues for Audit
Survey End Result — Identify Data Sources
Survey End Result — Obtain Operational Information for Planning
Categories of Information to Be Obtained
Common Ways to Obtain Survey Information
Summarize Survey Results
Summary
Chapter 7: Defining Audit Objectives: Second Stage of Audit Project Planning
Requirements for Planning
Tasks in Planning Audit Projects
Formulating Audit Objectives
Making Objectives Precise
Prerequisite Decisions in Formulating Audit Objectives
Applying the Decisions Preparatory to Formulating Audit Objectives
Summary
Chapter 8: Selecting the Scope and Methodology: Third Stage of Audit Project Planning
Selecting the Scope and Methodology
Steps in Designing the Plan for Fieldwork
Constraints Can Impact the Design
Design Step 1: Choose the Overall Strategy
Design Step 2: Select Audit Scope
Design Step 3: Select Analysis Techniques
Design Step 4: Choose Data to Use in the Audit
Design Step 5: Determine Data Sources and Collection Methods
Design Step 6: Select Methods to Assure Data Competence
Design Step 7: Test the Audit Plan
Document the Plan Using a Design Matrix
Summary
Chapter 9: Supervision
Major Supervisory Tasks
Supervising Multiple Audits
Standup Briefing Approach for Managing Audits
Summary
AUDITING PERFORMANCE
Chapter 10: Auditing Performance Using a Benchmarking Approach
Alternative Audit Tactics: Examine Processes or Results
The Benchmarking Audit Approach
Benchmarking Approach is Most Effective in Auditing Output Results
Common Objectives in Auditing Output Performance
Steps in Applying the Benchmarking Approach
Summary
Chapter 11: Measuring and Reporting Performance
Requirements of Auditing Standards
Why Performance Measurement is Important
Importance of Performance Measurement in Government is Officially Recognized
Having Management Measure and Report on Performance is Not a New Idea
Measuring Performance is a Required Skill for Auditors
Steps in Measuring and Reporting Performance
Summary
Chapter 12: Auditing Efficiency
What is Efficiency?
Why Measure Efficiency?
Conditions for Measuring Efficiency
Level and Trend Measures
Steps in Measuring Efficiency
Application of Steps to Six Efficiency Measures
Productivity Ratios: Development and Uses
Unit Costs: Development and Uses
Operating Costs to Transaction Dollars: Development and Uses
Productivity Indexes: Development and Uses
Operating Ratios: Development and Uses
Resource Utilization Ratios: Development and Uses
How Other Performance Measures Relate to Efficiency
Summary
Chapter 13: Auditing Timeliness
What is Timeliness?
Steps in Measuring and Auditing Timeliness
Application of Steps in Measuring and Auditing Timeliness
Summary
Chapter 14: Auditing Quality
What is Quality?
Categories and Dimensions of Quality
Product Quality
Service Delivery Quality
Steps in Measuring and Auditing Quality
Application of Steps in Measuring and Auditing Quality
Summary
Chapter 15: Auditing Program Results
What is a Program Results Audit?
Questions Performance Audits Can Answer
Establishing Causation
Elements of Impact Findings
Designs for Evaluating Impact
Steps in Evaluating Impact
Application of Steps in Evaluating Impact — To Juvenile Aftercare Program
Summary
AUDIT COMMUNICATIONS
Chapter 16: Writing Audit Reports Using Audit Objectives as an Aid
Using Audit Objectives to Outline the Report
Using Detailed Objectives as an Aid in Report Writing — An Example
Assuring Congruence between Objectives and the Report Message
Extra Requirements in Stating Objectives in the Report
Summary
Performance Auditing: A Measurement Approach, 2nd Edition
Ronell Rauum and Steve Morgan
© 2009 The IIA Research Foundation
Chapter 17: Using an Executive Summary
Auditors’ Dilemma: How to Meet Diverse Customer Needs in Reporting
The Answer — A Modular Formatted Summary
Six Standard Modules
Summary
Chapter 18: Briefing: A Valuable Reporting Tool
Benefits in Communicating Audit Findings
Usefulness in Keeping Concerned Parties Informed of Preliminary Audit Results
Briefing Preparation Can Subsequently Aid Report Writing
Summary
Chapter 19: Report Conference: A Valuable Writing Tool
What is a Report Conference?
Objectives and End Products of a Report Conference
Benefits of a Report Conference
Elements of a Successful Report Conference
Who Should Attend a Report Conference?
Preparation for the Conference
Summary
Chapter 20: Using Visual Aids in Reporting
Benefits of Visual Aids in Reporting
Making Visual Aids Useful
Differences between Tables and Graphics
Creating Effective Graphics
Selecting the Appropriate Graphic
Other Types of Visual Aids
Plan to Use Visual Aids from the Start of an Audit
Summary
THE FUTURE
Chapter 21: Evolution of Government Auditing: Performance Auditing at the Forefront
Evolving Roles and Responsibilities
Expansion of Auditor Skills
New Audit Services
Globalization of the Audit Environment
Summary
List of Exhibits
Exhibit 2-1: Basic Service Delivery Model
Exhibit 2-2: Service Delivery Model with Financial and Nonfinancial Resources
Exhibit 2-3: Service Delivery Model with a Delivery Dimension
Exhibit 2-4: Service Delivery Model with Management Dimension
Exhibit 2-5: Service Delivery Model with Information Dimension
Exhibit 2-6: Relationship of Safeguarding to the Service Delivery Model
Exhibit 2-7: Expectations of Government Managers for Performance
Exhibit 2-8: Performance Aspects Pertaining to Inputs, Processes, Outputs, and Outcomes
Exhibit 2-9: Outcome Measures
Exhibit 2-10: Model Linking Outcomes to Societal Impact
Exhibit 3-1: Traditional Finding Construct with Answerable Audit Objectives
Exhibit 3-2: Finding Elements Defined
Exhibit 3-3: Logical View of a Traditional Finding
Exhibit 3-4: Common Criteria Sources
Exhibit 3-5: Reasons Performance Expectations Are or Are Not Accomplished
Exhibit 3-6: Elements of Traditional Audit Findings and Two Variations
Exhibit 3-7: Descriptive Finding — Prison Inmate Costs
Exhibit 3-8: Normative Finding — Prison Inmate Costs
Exhibit 3-9: Traditional Finding — Prison Inmate Costs
Exhibit 3-10: Audit of Results — Well Water Safety
Exhibit 3-11: Audit of Processes — Well Water Safety
Exhibit 3-12: Possible Components of Results Findings
Exhibit 3-13: Components of Results Finding Applied to an Example
Exhibit 3-14: Common Results Criteria
Exhibit 3-15: Example: Finding Condition Element Under Results and Process Approaches
Exhibit 3-16: Potential Components of Process Findings
Exhibit 3-17: Components of Process Findings Applied to Example Findings
Exhibit 3-18: Common Procedural Criteria
Exhibit 3-19: Elements of Impact Findings
Exhibit 3-20: View of an Impact Finding
Exhibit 3-21: Impact Finding — Special Education Program
Exhibit 3-22: Impact Finding Converted to a Normative Finding
Exhibit 3-23: Illustration — Audit and Evaluation Concepts of Effect and Cause
Exhibit 3-24: Auditing a Process to Ensure Safety
Exhibit 3-25: Auditing a Process to Ensure Security
Exhibit 3-26: Auditing Results for Timeliness and Efficiency
Exhibit 3-27: Auditing Results for Inventory Losses
Exhibit 3-28: Auditing Results for Quality and Quantity
Exhibit 3-29: Auditing Results for Quantity of Citation Collections
Exhibit 3-30: Auditing Impact of a New Law
Exhibit 4-1: Testimonial Evidence, Methods for Collecting and Recording
Exhibit 4-2: Types of Evidence, Description and How to Collect and Record
Exhibit 4-3: Example Data Collection Form
Exhibit 4-4: Inspections of Rooms in National Parks
Exhibit 4-5: Criteria-based Rating Form
Exhibit 4-6: Form for Rating Service Delivery Staff
Exhibit 4-7: Evidence Types and Sources
Exhibit 4-8: Tests for Determining the Reliability of Computer-processed Data
Exhibit 4-9: Potential Weaknesses in Each Type of Evidence
Exhibit 4-10: Evidence Tests Applicable to Each Finding Element
Exhibit 4-11: Audit Documentation Paper Information Elements
Exhibit 5-1: Steps in Audit Selection Using Risk Analysis
Exhibit 5-2: Selection Factors Used by Two City Audit Offices
Exhibit 5-3: Risk Assessment Rating
Exhibit 6-1: Possible Survey End Results
Exhibit 6-2: Example Issues
Exhibit 6-3: Information to Be Obtained in a Survey
Exhibit 6-4: Common Ways to Obtain Survey Information
Exhibit 7-1: Tasks in Planning Audit Projects
Exhibit 7-2: Form and Content That Make Objectives Precise
Exhibit 7-3: Expectations of Government Managers for Performance
Exhibit 7-4: Identifying Performance Aspects
Exhibit 7-5: Phrasing Objectives to Identify Finding Elements
Exhibit 7-6: Why Program Goals Are Not Accomplished
Exhibit 7-7: School Meals, Objectives Identifying Performance Aspects and Finding Elements
Exhibit 7-8: Bill Payment, Objectives Identifying Performance Aspects and Finding Elements
Exhibit 7-9: Request Letter for Department of Motor Vehicles Case
Exhibit 7-10: Applying Decisions in Defining Objectives for DMV Case
Exhibit 7-11: Preparatory Decisions in Formulating Objectives for DMV Case
Exhibit 7-12: Possible Objectives for DMV Case
Exhibit 7-13: Possible Objectives with Subobjectives for DMV Case
Exhibit 8-1: Steps in Audit Design
Exhibit 8-2: Possible Objectives with Subobjectives for DMV Case
Exhibit 8-3: Design Matrix Content
Exhibit 8-4: Design Matrix Form for DMV Case
Exhibit 9-1: Possible Selection Criteria for Determining Staff Needs
Exhibit 10-1: Problem Solving and Benchmarking and Their Application to Auditing
Exhibit 10-2: Basic Aspects of Performance
Exhibit 10-3: Common Objectives for Output Performance Audits
Exhibit 10-4: Benchmarking Auditing Approach: Phases and Steps
Exhibit 10-5: Computing Efficiency Measures for Individual Outputs
Exhibit 10-6: Computing Output Weights
Exhibit 10-7: Table of Efficiency Levels and Trends in Selected States
Exhibit 10-8: Timeliness — Percent of Claims Processed Within 14-Day Standard — 2008
Exhibit 10-9: Quality — Percent of Claims Processed Accurately — 2008
Exhibit 10-10: Calculating Opportunity Hours
Exhibit 10-11: Common Causes of Problems — Quality, Timeliness, Efficiency
Exhibit 10-12: Illustrative Fishbone Diagram
Exhibit 10-13: Illustrative Force-field Analysis
Exhibit 10-14: Solution Selection Matrix for Improving Efficiency
Exhibit 11-1: Steps in Measuring Program Performance
Exhibit 11-2: Aspects of Performance Warranting Consideration for Measurement
Exhibit 11-3: Performance Measurement System
Exhibit 11-4: Measurements for Drinking Water Delivery
Exhibit 12-1: Agency Cleaning Operations
Exhibit 12-2: Steps in Measuring Efficiency
Exhibit 12-3: Productivity Ratio — Permit Services Delivery (North Area)
Exhibit 12-4: Productivity Trends for Permit Services
Exhibit 12-5: Comparison of Productivity Ratios Between Offices Processing Applications
Exhibit 12-6: Computing Productivity Level Ratios — Three Outputs
Exhibit 12-7: Computing Trend Measures — Three Outputs
Exhibit 12-8: Computing Productivity, Indirect Resources Applied Equally
Exhibit 12-9: Computing Productivity, Indirect Resources Varies for Each Output
Exhibit 12-10: Weighting Outputs
Exhibit 12-11: Permit Services, Computing Productivity Indexes
Exhibit 12-12: Permit Services
Exhibit 12-13: Computing Productivity Indexes — Two Outputs
Exhibit 13-1: Steps in Measuring and Auditing Timeliness
Exhibit 31-2: Outputs for Example Services
Exhibit 13-3: Timeliness Dimension for Example Services
Exhibit 13-4: Timeliness Unit of Measure for Example Services
Exhibit 13-5: Criteria for Example Services
Exhibit 13-6: Aging Schedule — Collection of Receivables
Exhibit 13-7: Backlog Analysis
Exhibit 13-8: Example Causes of Untimely Service
Exhibit 14-1: Dimensions and Aspects of Service Delivery Quality
Exhibit 14-2: Steps in Measuring and Auditing Quality
Exhibit 14-3: Example Outputs for Selected Services
Exhibit 14-4: Example Quality Categories and Dimensions for Selected Services
Exhibit 14-5: Example Units of Measure for Selected Programs
Exhibit 14-6: Comparison Criteria Applied to Example Programs
Exhibit 14-7: Example Causes of Poor Quality
Exhibit 15-1: Questions a Performance Audit Can Answer
Exhibit 15-2: Elements of Impact Findings
Exhibit 15-3: View of an Impact Finding
Exhibit 15-4: Designs for Evaluating Program Results
Exhibit 15-5: Efficiency Prior to Automation
Exhibit 15-6: Steps in Evaluating Impact
Exhibit 15-7: Facts About the Juvenile Aftercare Program
Exhibit 16-1: City Meter Reading Audit, Formulating the Audit Objectives
Exhibit 16-2: Audit Objectives Stated as a Series of Questions
Exhibit 16-3: City Meter Reading Audit, Objectives Restated as Report Captions
Exhibit 16-4: City Meter Reading Audit, Writing to the Side Captions
Exhibit 16-5: City Meter Reading Audit, Detailed Findings
Exhibit 17-1: Executive Summary
Exhibit 20-1: Sample Table, Hospital Operating Efficiency
Exhibit 20-2: Bar Chart, Budget Plans
Exhibit 20-3: Chart Selection Matrix
Exhibit 20-4: Single Bar Chart, Backlog of Disability Claims
Exhibit 20-5: Stacked Bar Chart, Timing in Forwarding Retirement Papers
Exhibit 20-6: Cluster Bar Chart, Building Cost Components
Exhibit 20-7: Line Chart, Population of Aging Veterans
Exhibit 20-8: Positive-Negative Chart, Crop Insurance Loss Ratio
Exhibit 20-9: Pie Chart, Postal Service Customer Satisfaction
Exhibit 20-10: Radar Chart, Staffing vs. Demand
Exhibit 20-11: Radar Chart, Bus Service Opinion Survey
Exhibit 20-12: Map for Police Patrol Program

Über Autor(innen)

Ronell B. Raaum, CGAP, CGFM, is a curriculum development specialist at the Government Audit Training Institute, Graduate School, in Washington, DC. The Institute has 50 training courses in its curriculum, predominantly on performance auditing. It provides these courses to federal, state, and local government auditors and to international auditors. He is responsible for developing new courses and maintaining the currency of existing courses. He has been doing this since 1993 with two sabbaticals. Mr. Raaum spent 31 years as an auditor at the U.S. Government Accountability Office (GAO). Among his many assignments, he was a member of a joint project with the executive branch to measure the productivity of federal agencies. He was a manager in GAO’s National Productivity Group where the audit focus was on measuring the performance of agency programs and applying benchmarking to identify performance problems and possible solutions. He participated in writing the 1988 revision of the Government Auditing Standards. He served in GAO’s Office of Policy where he reviewed audit reports and helped formulate policy on writing audit reports. While at GAO, he was a member of the advisory committee of experts on performance measurement that provided guidance to the Governmental Accounting Standards Board in ist “Service Efforts and Accomplishment” research project. Mr. Raaum is co-author of a book on operational auditing. He has written chapters for three books on auditing and numerous articles on performance auditing. He is a Certified Government Auditing Professional and a Certified Government Financial Manager. He is a member of the National Association of Local Government Auditors, the Association of Government Accountants (AGA), and The Institute of Internal Auditors (IIA). He is a past president of the second largest chapter of AGA and has served in numerous positions at the chapter and national level. He has a bachelor’s degree in accounting from Montana State University.

Stephen L. Morgan, CIA, CGAP, CFE, CGFM, former city auditor of Austin, Texas, was responsible for directing performance audits, fraud investigations, and consulting engagements for the City of Austin. During his tenure, the City of Austin strengthened accountability for performance and financial management, ethics and integrity, and transparency to the public. Morgan’s office recently received the 2008 Employer of the Before becoming City Auditor in 2000, Morgan was Deputy City Auditor, Assistant City Auditor, and Performance Audit Manager. Before joining the City Auditor’s Office in 1985, Morgan was an auditor in the U.S. Government Accountability Office’s National Productivity Group and was responsible for auditing federal productivity programs from 1977 until 1984. Morgan was appointed to the Advisory Council on Government Auditing Standards by the Comptroller General of the United States in 2001 and reappointed in 2005. He has recently served as chairman of the National Intergovernmental Audit Forum’s Emerging Issues Committee. He also served as an executive committee member of the Southwest Intergovernmental Audit Forum. In 2007, he received the National Intergovernmental Audit Forum’s Excellence in Government Performance and Accountability National Award from the Office of the Comptroller General, and in 2002 he became the fourth annual recipient of the Harry Hatry Distinguished Performance Measurement Practice Award from the American Society of Public Administration, honoring his lifetime of contributions to public service. In May 2009, Morgan received the Victor Z. Brink Memorial Award for Distinguished Service at the IIA’s International Conference in South Africa. This is IIA’s highest award for leadership and service to the global internal auditing profession. An active member of The Institute of Internal Auditors, Morgan recently served as chairman of the North American Board and North American director on the International Board. Former positions include member of the Global Finance Committee, Internal Auditing Standards Board, chairman of the International Government Relations Committee, and past-president of the Austin Chapter where in 2005 he received the Chapter’s Practitioner of the Year award. Morgan has instructed, designed, and delivered courses on performance measurement, management, and auditing. For 18 years he has served as a faculty member for the USDA’s Graduate School and the Government Audit Training Institute. He co-authored three textbooks: Performance Auditing: A Measurement Approach (first and second editions) and Auditor Roles in Government Performance Measurement: A Guide to Exemplary Practices at the Local, State, and Provincial Levels. He also co-authored a chapter entitled Public Sector Performance Auditing in Developing Countries in the 2007 World Bank publication Performance Accountability and Combating Corruption. Morgan holds a bachelor’s degree in government from the University of Texas at Austin and a master’s in public administration from the Lyndon B. Johnson School of Public Affairs of the University of Texas. He graduated with honors and was elected to Phi Beta Kappa. He is a certified internal auditor, certified government audit professional, certified government financial manager, and certified fraud examiner.