Performance Audit

Contents

1. What is performance auditing? 1

1.1 What is performance auditing according to INTOSAI? 1

1.2 What is the special feature of performance auditing? 1

1.3 What ideas form the basis of performance auditing? 2

1.4. What are the basic questions in performance auditing? 3

1.5 What does auditing of economy, efficiency and effectiveness mean? 4

1.6 How does public management affect performance auditing? 8

1.7 How does performance auditing relate to performance measurement and program evaluation? 10

1.8 Performance measurement 10

1.9 Summary 16

1. What is performance auditing?

1.1 What is performance auditing according to INTOSAI?

INTOSAI’s Auditing Standards (AS 1.0.38 and 1.0.40) state the following:

‘The full scope of government auditing includes regularity and performance audit’, and ‘Performance auditing is concerned with the audit of economy, efficiency and effectiveness and embraces:

(a) Audit of the economy of administrative activities in accordance with sound administrative principles and practices, and management policies;

(b) audit of the efficiency of utilization of human, financial and other resources, including examination of information systems, performance measures and monitoring arrangements, and procedures followed by audited entities for remedying identified deficiencies; and

(c) Audit of the effectiveness of performance in relation to achievement of the objectiveness of the audited entity, and audit of the actual impact of activities compared with the intended impact’.

Performance auditing is based on decisions made or goals established by the legislature, and it may be carried out throughout the whole public sector.

1.2 What is the special feature of performance auditing?

As stated in the Auditing Standards, performance auditing is not overly subject to specific requirements and expectations. While financial auditing tends to apply relatively fixed standards, performance auditing is more flexible...