Performance audit
From Wikipedia, the free encyclopedia
Performance audit refers to an examination of a program, function, operation or the management systems and procedures of a governmental or non-profit entity to assess whether the entity is achieving economy, efficiency and effectiveness in the employment of available resources. The examination is objective and systematic, generally using structured and professionally adopted methodologies. Results and findings are stated in terms of yardsticks derived from the entity’s mission, vision, values or goals, or metrics based on these.
Many national governments support professional or advisory bodies that publish standards and guides for conducting performance audits. In the United States, the standard for government performance audits is the Generally Accepted Government Auditing Standards (GAGAS), maintained by the federal Government Accountability Office (GAO). These are often referred to as the "yellow book".
Performance audits are often conducted by Internal Auditors who are employees of the entity being audited. However, some national governments require agencies, departments and branches to periodically retain outside auditors to conduct them. All auditors who follow GAGAS standards are required to maintain independence, supervision, continuing professional education, and conduct the audit using a specific process designed to increase the quality of the audit and reduce the politicization of audit work.
Although there are separate professional credentials and certifications for Financial Auditors, the persons that conduct Performance Audits in the USA are often Certified Public Accountants, Certified Internal Auditors, or have a broad background in public policy, business or public administration.
The scope of performance audits may include the detection of fraud, waste and abuse, although often these are not included in the scope. Prior to engaging in a performance audit, the auditor must have a scope and plan defined which will be used to guide the audit process.
Performance auditing differs from performance measurement, in that performance auditing specifically refers to audits conducted according to GAGAS standards, wheras performance management may include a broad variety of assessment activities that do not meet the rigour of the audit standards.
