What to Expect—An Auditee's Guide to the Performance Audit Process

7—Examination phase of a performance audit

During the examination phase of a performance audit, the audit team of the Office of the Auditor General (the Office or OAG) gathers the evidence that will support all statements it will make in the audit chapter.

Some general points of information are the following:

  • The audit principal normally offers to consult with senior management of the entity at the appropriate decision points during the audit. Prior to any meetings, auditors are expected to notify the audited entity of the main topics to be discussed.
  • After the examination phase begins, the audit team may decide that the scope of the audit needs to be changed significantly. In such a case, the audit team and appropriate entity officials should discuss the rationale, timing, and approach, recognizing that the Auditor General will make the final decision.
  • The OAG will inform the audited entity if its minutes of meetings and interviews will require sign-off by appropriate entity officials, where these documents will be relied upon as audit evidence.
  • As the audit evidence is acquired, the OAG will endeavour to obtain confirmation and validation of facts from entity officials to help ensure the accuracy, relevance, and completeness of the evidence. The process may require a series of meetings with entity officials to ensure agreement on the facts gathered during the audit examination and field work. The audit team and the audited entity should resolve any outstanding issues as quickly as possible.
  • How the OAG will debrief the audited entity should be agreed on before the examination phase ends. Appropriate senior entity officials are expected to participate in these debriefings.

Related information sheets

Steps and interaction between the OAG and the audited entity in the examination phase

OAG

Audited Entity

Early in the examination phase

The audit team prepares a report (entity plan summary) on the objectives, scope, approach, and criteria of the audit, and sends numbered/controlled copies of it to the entity's OAG contact/liaison person. This person will coordinate comments on the suitability of the criteria and on management's responsibility for the subject area.

The OAG will disclose unresolved disagreements, if any, about criteria and the entity management's responsibilities in the audit chapter, with appropriate explanation.

The entity is expected to track the internal distribution of the copies of the entity plan summary received, subsequently retrieve them when requested, and return them to the OAG within one week of the report being tabled in the House of Commons.

Senior management is expected to acknowledge in writing, within two weeks of receipt of the entity plan summary, the entity's responsibility for the areas and activities to be audited and provide comments on the suitability of the criteria against which they will be assessed.

The entity is expected to ensure that all its officials affected by the audit (as well as its departmental audit committee) are sufficiently briefed on the purpose, nature, and timetable of the planned audit of the entity as early as possible in the audit process.

The audit team indicates any plans to rely on work conducted by, or on behalf of, the entity's internal audit unit.

The entity is expected to provide audit files and other related information in a timely manner as required by the audit team.

Given the scope of the audit, the audit team asks the entity's OAG contact/liaison person to confirm in which official language(s) the principal's (PX) draft chapter will be required, in whole or in part, for the confirmation and validation of facts process.

The entity is expected to inform the OAG of the language requirements for the PX draft chapter.

During the examination phase

The audit team

  • acquires knowledge of the audit subject and audit evidence according to the examination plan;
  • discusses issues with entity management as they arise;
  • in advance of meetings, notifies the audited entity of the main topics to be discussed;
  • asks the appropriate entity staff to sign off on documented meeting and interview minutes, if there is an intention to rely on such records as audit evidence. Such minutes would normally be sent to the appropriate entity staff within five working days of the meeting;
  • informs the audited entity, in writing, of any significant changes to the entity plan summary (objectives, scope, approach, criteria, and timetable) and provides a rationale for the changes. Where appropriate, a revised entity plan summary would be issued;
  • shares facts with entity management and asks for confirmation;
  • periodically offers to brief entity officials, senior management of the entity as required, and, if requested, the departmental audit committee on emerging findings throughout the examination phase and encourages a discussion of proposed recommendations as they are developed;
  • seeks the views of the deputy head or senior management, as early as possible, when developing recommendations on actions needed to correct a problem (the audit team will report corrective action where there is sufficient evidence that it is under way); and
  • asks the entity's OAG contact/liaison person how many copies of the PX draft chapter it will require in the primary official language of communication and, in whole or in part, in the second official language for internal circulation, as part of the confirmation and validation of facts process.

The entity is expected to

  • provide documents and information in a timely manner as required by the audit team to complete the examination;
  • discuss issues with the audit team and indicate any corrective action under way;
  • be prepared to answer questions related to the main topics to be discussed at meetings with the audit team;
  • comment and sign off, when requested, on meeting and interview minutes expeditiously (normally within five working days);
  • provide comments, in writing, on the changes to the entity plan summary;
  • examine all statements of fact and confirm their correctness or, if the facts are incorrect or incomplete, provide the correct or complete information along with appropriate supporting evidence;
  • participate in the briefings to understand the nature and the implications of the findings and the proposed recommendations and to obtain answers from the OAG to any questions (in this case, the entity officials may include the deputy head or other entity senior management, as appropriate, as well as the departmental audit committee, as appropriate); and
  • provide input to the audit team to ensure that the development of recommendations considers implementation aspects (in this case, the entity officials would include the deputy head or other entity senior management as appropriate).

The entity's OAG contact/liaison person is expected to inform the OAG of the number of copies of the PX draft chapter it will require, in whole or in part, in each official language for the confirmation and validation of facts process.