Performance Audit Manual

Background

7.1 Performance audits, annual audits and special examinations are the pre-dominant forms of examination used by the Office to fulfill its legislative mandate. Studies provide a form of inquiry that may be more appropriate in some cases. For example, a decision to do a study as an alternative form of inquiry may be taken when the nature of the subject matter is not well understood or there is an absence of audit criteria, or both.

7.2 The Office's Strategic Plan sets out a vision that applies equally to studies and audits. The vision is to serve Parliament and the well-being of Canadians by promoting, in all our work for Parliament accountable government, an ethical and effective public service, good governance, sustainable development, and the protection of Canada's legacy and heritage.

7.3 Studies are normally more descriptive or exploratory in nature than audits. Studies usually concentrate on one or more of the following elements: describing a subject or developing an information base, exploring that subject or information base, and developing a method to assess that subject or information base in the future. These elements can be studied all at once or over a series of years.

7.4 Because of the more descriptive or exploratory nature of studies, the objectives of studies can be different than audit objectives. Examples of the objectives of studies are to:

• describe a subject;
• identify lessons learned and good practices;
• draw attention to a certain area of concern or leading thinking;
• identify issues related to a certain area;
• develop a common understanding of a subject; and
• identify expectations or criteria to use in future examinations.

A comparison of policies between performance audits and studies

7.5 Studies are performed with the same degree of professionalism as other Office products. They have the same systematic, disciplined, evidence-based approach. The process they follow includes planning, examination and reporting. The requirements for evidence (Section 4.74 to 4.80 of the Performance Audit Manual) fully apply, i.e. evidence should be appropriate (relevant, reliable and valid) and sufficient. (October 2004)

7.6 Study policies are outlined in Annex 1. Studies have the same general and conduct policies as performance audits. Study policies for examination, reporting and follow-up differ somewhat from performance audit policies.

7.7 There are three key differences between Performance audit and study examination policies.

• Studies are not required to have objectives that can be concluded against. In some cases the objective may be to describe or explore a subject. In those cases the conclusion would outline the results of that exploration rather than concluding against an objective.
• Studies should not have criteria and consequently are not required to have an evaluation against those criteria. However, an objective of a study can be to develop criteria.
• Studies should rarely include recommendations. However, in some rare instances, specific recommendations could be appropriate. For example a study could recommend that the government study something further or that a criterion or set of criteria be endorsed. (October 2004)

7.8 There are four key differences between Performance audit and study reporting policies.

• Studies do not have to disclose criteria used and any disagreements with management on those criteria because studies should not have criteria.
• Recommendations do not have to be reported because studies are not required to include recommendations. They may be included in the rare cases where they are deemed appropriate.
• Studies are not required to include management comments unless it is deemed appropriate to include them.
• Studies are not required to report on conclusions reached against study objectives. (October 2004)

7.9 Studies do not have to be followed-up. (October 2004)

Practice Expectations and Performance Audit Quality Management Framework

7.10 Studies share the practice expectations that are common to all product-lines found in Chapter 8 of this manual. They also share the same Performance Audit Quality Management Framework found in Chapter 9.

7.11 Studies have a similar process control framework to audits found in Figure 6 of this manual. However, when the study team submits their chapter proposal for approval by the Performance Audit Management Committee, it should be clear that the team is proposing a study rather than an audit and why the study is the more appropriate form of inquiry. The audit team should not combine a study and an audit in the same chapter. (October 2004)

Quantification

7.12 DELETED. (October 2004)

Annex 1

Study Policies

General Policies The Code of Values, Ethics and Professional Conduct and all other Office policies should be adhered to in all Office activities. All studies should be carried out in accordance with the Office's study policies described below.

Study Conduct Policies The study team should: exercise due care in carrying out the study; be made up of individuals who have an objective state of mind and are independent; collectively have knowledge of the subject matter and the proficiency necessary to fulfill the requirements of the study; ensure proper supervision of all its members; seek entity management's views about critical elements of the study; obtain sufficient and appropriate consultation and advice throughout the study; maintain appropriate documentation and files; and deliver clear, persuasive and effective communications to Parliament and other stakeholders.

Study Examination Policies Each study should have: clear objectives; a clear scope that focusses the extent, timing and nature of the study; study questions selected on the basis of relevance to the Office's mandate, significance and suitability to study; sufficient appropriate evidence to support observations; objective evaluation of the evidence to develop observations; sufficient appropriate evidence to support conclusions; and a report that meets the study reporting standards described below.

Study Reporting Policies Each study should result in a report that clearly communicates to the reader: The objectives, nature, time period covered by the study, and scope of the study, including any limitations. The professional standards and policies used. A description of the program or activity that was studied, including management's responsibilities. The observations made. Conclusions reached. (October 2004)

Study Follow-up Policy DELETED (October 2004)