PLANNING FOR AN

AUDIT ASSIGNMENT
Steps in Planning
Understanding entity
objectives, operations and control structure etc.
Identification of risks
composite risk consideration
Risk grading and auditability
considerations
Audit Program on each selected risk
Audit criteria and audit steps
Reviews and approvals at appropriate
levels
Steps in Planning PA
Approval of audit assignment plan
Preparation of an audit assignment plan
Decision to proceed or abandon audit
Preparation of a preliminary survey report
PSR
Objectives of PSR
To understand the audit entity, determine the objectives and
scope of audit and identify Issues of Potential Significance
to make an initial assessment whether the audit office should
continue with the audit in question keeping in view the
auditability of the entity and possible value addition by audit
In case the FAO is confident about the value
addition and auditability there will be no need of
formal PSR.
PSR Salient Features
Familiarization with the
Objectives and operations of the entity
Expected outputs, outcomes and impact
Key internal controls
Define Audit Objectives - extent of audit examination for PA
objectives are normally 3Es , there may be other objectives regarding
other Es or relating to other type of audit in case of integrated audit
Determine Audit Scopeidentifying Issues of Potential Significance
Considerations for Going Ahead
Existence of
effectiveness
related issues
Auditability of
selected
issues
Extent of
value addition
Critical Points in PA Planning
Should be effectiveness related issues in
case of PA. Issues relating to economy and
efficiency are treated in PA only if auditable
effectiveness related issues are present
IPS related to
each Audit
Objective
If devised by the auditor it should have been
agreed by the entity.
Audit Criteria
related to
each IPS
Reliable and complete data should be
available to carryout audit tests
Sources of
information
Audit Assignment Plan
When the PSR has been approved
and the decision to continue with the
audit has been taken;
When PSR is not required by virtue of
the fact that the FAO has detailed
knowledge about the audit assignment
or because the AGP has finally
decided to conduct this audit anyway.
This work is
undertake
in the
following
situations:
Audit Assignment Plan
The assignment audit plan is a
major tool for controlling,
monitoring and managing the
audit by the senior
management.
Accountability of the audit team
is determined with reference to
the assignment audit plan.
Audit Assignment Plan
assignment plan comprises
audit objectives
audit scope
audit approach
IPS and related criteria
Audit team
the budget and scheduling of the audit
Audit Objectives
The Auditor In-charge should re-visit ???? the
PSR, if prepared, and see if the objectives can be
adopted as defined at the time of PSR or would
they require some modification. In any case, this is
the time to firm up the audit objectives finally.
If the DG decides that the performance audit
assignment should focus on certain areas of
compliance audit or study certain problem areas in
detail, the audit objectives should specify these
matters clearly.
Audit Scope
Audit scope refers to the extent of audit
coverage in terms of
time period,
stage of the project of program or organization,
the locations and facilities to be included in audit
coverage and any aspect which will not be covered
with reasons for exclusion.
Audit scope determines the responsibility
of the audit team in the assignment
PA Criteria
In performance auditing, the auditors have to lay
down audit criteria for each issue of potential
significance.
It is unlike financial auditing where the audit criteria
are determined by standard practices.
In performance auditing, there is no single source of
audit criteria. The auditors have to undertake a sort
of research to determine the benchmarks against
which they would assess the performance of the
auditee.
PA Criteria
In developing/selecting audit criteria following sources may
be reviewed
Objectives of the organization, project or program
Generally accepted management practices
Past performance standards
Standard operating procedures (SOPs) of the organization
Rules and regulations applicable to the organization
Sector studies
Comparison with similar organizations, projects or programs
State-of-the-art studies
Academic pronouncements of the profession
Performance specifications of manufacturers of an
equipment
PA Criteria
Good practice in
performance auditing
requires that the audit
criteria be shared
with the auditee
management and
their agreement
obtained at this stage
of planning.
Audit Program
The audit program is a written plan for execution of
an audit assignment.
It consists of audit procedures to be followed during
the audit execution phase. The audit program is a
guide for systematic fieldwork.
It is, at the same time, an effective tool of
supervision for ensuring that the auditors follow
appropriate procedures and the work is completed
according to the planned schedule and in a manner
that achieves audit objectives.
Audit Program
Unlike financial
auditing, standard
ready-to-use audit
programs do not exist
for performance
auditing. For each
performance audit
assignment a tailor-
made audit program
has to be written.
The Auditor In-charge
is responsible for
developing the audit
program. The Director
will review the audit
program and submit it
to DG for approval.
The field work will
start after approval of
the audit program by
the DG.
Exercise
IPS in SWM
Program
Program
achievements are
being monitored
appropriately
Waste collection
is being carried
out efficiently and
economically
Program achievements
Program targets are
well identified and
measurable
Reliable and
sufficient data is
being generated to
monitor targets
The program should
achieve its targets as
planned within the
estimated time frame
and at planned costs
Waste Collection
Waste should be collected from each waste depot according
to a collection schedule
The SWM management should locate bins / containers for
waste collection at suitable locations after conducting a study
so that infectious waste is not mixed with other types of
waste.
Junk shops should be allowed to operate only at designated
areas and after proper licensing.
Waste Collection
There should be weighbridges for weighing
wastes located preferably near the dumping
sites. The weighbridges should be operational
and the staff should maintain record of all
waste weighed on a daily basis.
The cost of collection per ton should be
minimum.