Performance Audit Manual

Preface

1. The Office of the Auditor General of Canada has one business line — legislative auditing — and six product lines:

• annual audit of the summary financial statements of the Government of Canada;
• annual audits of Crown corporations and other entities (federal, territorial, and international);
• special examinations of Crown corporations;
• performance audits of departments and agencies;
• environment and sustainable development monitoring activities; and
• assessments of agency performance reports.

The Practice Development Committee works with employees to develop and approve policies and expected practices for each product line, with the objective of ensuring that quality is maintained at the highest professional level.

2. This Performance Audit Manual sets out the Quality Management Framework and related policies that govern the conduct of all performance audit work, including environmental and sustainable development audits and studies, and provides guidance to auditors in complying with these policies. The purpose of the manual is to:

• assist users in achieving the highest possible level of quality in performance audits;
• promote the highest possible level of professional competence in Office employees;
• provide a basis for measuring audit performance; and
• allow others outside the Office to gain a better perspective and understanding of the practices and professionalism of the Office.

3. The Manual has been written to meet the specific needs of performance audit practitioners. It describes the conceptual underpinnings of the Office's performance audit methodology, explaining in broad terms how these audits should be selected, planned, conducted and reported. The Manual refers readers to various audit tools and other guidance, providing only minimal "how to" information.

"Please note that modifications are carried out periodically to the Performance Audit Manual. A date is placed under the modified paragraphs or sections indicating the date of revision, and a date is placed in the footer indicating the current version of the Manual. Finally, appendix 3 gathers all the changes carried out to the Manual as of June 2004".

Use of the Manual

4. The Office has developed a Quality Management Framework (QMF) to guide employees in managing performance audits. This Framework is designed to provide reasonable assurance that our performance audits are conducted in accordance with applicable legislative requirements, professional standards and Office policies.

5. The policies and guidance contained in this Manual are in accordance with the standards for assurance engagements set by the Canadian Institute of Chartered Accountants. While the Office adopts these standards as the minimum requirements for our audits, we also draw upon the standards and practices of other disciplines.

6. Performance auditing policies are written as should statements and are to be complied with. Disagreements with the policies contained in the Manual or inability to comply with any of them should be brought to the attention of the Performance Audit Management Committee immediately.

7. Performance audit practice expectations describe actions or behaviour that the auditor is expected to meet in carrying out the audit. If the auditor is unable to comply with such statements, the matter should be reported to the responsible Assistant Auditor General or the Commissioner of the Environment and Sustainable Development immediately.

Organization of the Manual

8. The Manual generally follows the structure of the Performance Audit Quality Management Framework as outlined in Figure 1. Key elements of the Performance Audit QMF are described in Chapter 9.

9. The policy and practice expectations related to Leadership and Planning are contained in the first two chapters of the Manual.

Chapter 1 sets out the general policies, defines performance auditing, describes the mandate, and links performance auditing and accountability.

Chapter 2 describes the overall planning process, how performance audits are selected, and the roles and responsibilities of key players.

10. The policy and practice expectations related to Audit Management are covered in chapters 3 through 8.

Chapter 3 sets out the policies for audit conduct and practice expectations to meet them.

Chapter 4 sets out the audit planning process, audit examination policies, and practice expectations to meet them.

Chapter 5 sets out the reporting policies and practice expectations to meet them.

Chapter 6 sets out the policies for follow-up. (May 2005)

Chapter 7 sets out the policies for conducting studies.

Chapter 8 sets out practice expectations common to all product lines.

11. Office guidance related to the Performance Audit QMF Client Focus elements can be found in the External Communication Policy document and in the Communications Plan.

12. Policies and guidance related to People Management apply Office-wide and are outlined in the people section of the INTRAnet. Some of the specific practice expectations for people management at the team level are contained in the Manual at sections 8.55 to 8.59.

13. Guidance related to the Performance Audit QMF Continuous Improvement elements is contained in chapter 8 of the Manual at sections 8.60 to 8.67.

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