Download
1 / 16
160 likes | 275 Views
dd. This learning session will help the auditor:. Design audit objectives understand why audit criteria are used in performance audits; learn how to develop and select audit criteria; understand what suitable criteria look like. Relevant reference information includes:. g.
E N D
This learning session will help the auditor: • Design audit objectives • understand why audit criteria are used in performance audits; • learn how to develop and select audit criteria; • understand what suitable criteria look like. Relevant reference information includes:
g • are identified for each audit objective; ` • describe a standard of performance (benchmarks) that would need to occurring – for the auditor to positively conclude that audit objective were met. • are used to compare what should be happening (benchmarks) to what is actually happening. Audit Criteria: Objective Criteria
g Audit Criteria must be suitable (CICA-5025.26) • relevant, • reliable, • neutral, • understandable and • complete Characteristics of audit criteria Criteria
Suitable Audit Criteria • Relevant:means that criteria the contribute to findings and conclusions that meet the objective(s) of the engagement. • Reliable: means that the criteria result in consistent conclusions when used by different auditors in similar circumstances. • Neutral: means that the criteria are free from bias that would cause the auditor's findings and conclusions to mislead intended users of his or her report. • Understandable: means that the criteria are clearly stated and are not subject to significantly different interpretations by intended users. • Complete: means that all the criteria that could affect the auditor's conclusion against the audit objective are identified or developed, and used.
Suitable Audit Criteria • Relevant:means that criteria the contribute to findings and conclusions that meet the objective(s) of the engagement. • Reliable: means that the criteria result in consistent conclusions when used by different auditors in similar circumstances. • Neutral: means that the criteria are free from bias that would cause the auditor's findings and conclusions to mislead intended users of his or her report. • Understandable: means that the criteria are clearly stated and are not subject to significantly different interpretations by intended users. • Complete: means that all the criteria that could affect the auditor's conclusion against the audit objective are identified or developed, and used.
Use a specialist to identify or develop criteria, or to assess their suitability. • Seek management’s feedback regarding the suitability of the audit criteria (insert Pop-up 1) • Obtain criteria from ‘generally accepted’ sources. (insert Pop-up 2- next slide) • Ensure criteria are fair, objective, unbiased and policy neutral To draft relevant, reliable and neutral criteria:
“Generally accepted” sources include: • Criteria established by laws or regulations; and • Criteria established by other recognized bodies of experts; • If no generally accepted criteria do not exist, other sources are considered, including : • Entity standards; and • Audits from other jurisdictions or similar audits; • Criteria used in similar OAG BC audits. (Insert Pop-up3) Link to audit news
Suitable Audit Criteria • Relevant:means that criteria the contribute to findings and conclusions that meet the objective(s) of the engagement. • Reliable: means that the criteria result in consistent conclusions when used by different auditors in similar circumstances. • Neutral: means that the criteria are free from bias that would cause the auditor's findings and conclusions to mislead intended users of his or her report. • Understandable: means that the criteria are clearly stated and are not subject to significantly different interpretations by intended users. • Complete: means that all the criteria that could affect the auditor's conclusion against the audit objective are identified or developed, and used.
Avoid using vague words such as adequate, reasonable, appropriate, sufficient, well managed
Criteria are generally positive, normative statements. For example: • Management complies with ……the policy. OR • There is compliance with …..the policy. • It is best not to state criteria as ‘We expected to find compliance with the policy’ as this may connotate bias, and it obscures the fact management usually acknowledges criteria are suitable.
Suitable Audit Criteria • Relevant:means that criteria the contribute to findings and conclusions that meet the objective(s) of the engagement. • Reliable: means that the criteria result in consistent conclusions when used by different auditors in similar circumstances. • Neutral: means that the criteria are free from bias that would cause the auditor's findings and conclusions to mislead intended users of his or her report. • Understandable: means that the criteria are clearly stated and are not subject to significantly different interpretations by intended users. • Complete: means that all the criteria that could affect the auditor's conclusion against the audit objective are identified or developed, and used.
Completeness • The audit criteria supporting an audit objective should allow for a complete assessment of the relevant part of a program against the audit objective. • Objective Criteria
Recap • Develop audit criteria for each audit objective. • Audit criteria must be suitable, i.e.: relevant, reliable, neutral, understandable and complete • Audit criteria should be clear, specific and measureable. • Whenever possible, use generally accepted criteria. • Use a specialist to identify or develop criteria, or to assess their suitability. • Seek management’s feedback regarding the suitability of the audit criteria. • Ensure completeness by asking yourself: If all these criteria were evaluated would the auditor be able to conclude against the audit objective? • Document your judgments and decisions regarding why certain criteria were selected or rejected.
