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

Performance audits examine the government’s activities or programs against established criteria to answer the following questions:

• Are activities or programs being run with due regard for economy, efficiency, and environmental impact?
• Does the government have the means in place to measure the effectiveness of its activities or programs?

In other words, a performance audit is an independent, objective, and systematic assessment of how well the government is managing its activities, responsibilities, and resources.

Performance audits are planned, performed, and reported in accordance with professional auditing standards and with policies of the Office of the Auditor General of Canada (OAG). Audits are conducted by qualified auditors who

• establish audit objectives and criteria for the assessment of performance,
• gather the evidence necessary to assess performance against the criteria,
• report both positive and negative findings,
• conclude against the established audit objectives, and
• make recommendations for improvement when there are significant differences between criteria and assessed performance.

Performance audits contribute to a public service that is effective and a government that is accountable to Parliament and Canadians.

Performance audits do not question the merits of government policies. Rather, they examine the government’s management practices, controls, and reporting systems based on its own public administration policies and on best practices.

An audited entity (or auditee) is a federal department, agency, or other entity (for example, a foundation) that is subject to an audit under the Auditor General Act.

A performance audit involves the following:

Audit team—A team of auditors responsible for conducting an audit. The team reports to an engagement leader and may include contract staff assigned to the team.

Auditor—A member of an audit team who may be either an OAG employee or contract staff assigned to the team.

Engagement leader—Usually an OAG Audit Principal with the overall responsibility for conducting performance audits that may involve one or more entities. The engagement leader manages the entire audit cycle and ensures the quality of audit products produced by the team.

Entity principal—An OAG Audit Principal designated to serve as the senior liaison or point of contact between the OAG and the audited entity. The entity principal coordinates with other OAG teams on audits affecting the entities for which he or she is responsible.

Lead auditor—Usually an OAG Audit Director who manages on a day to day basis the audit project and a team of auditors.

A performance audit may also involve the following:

Adviser—An individual recognized as a leader in a field of expertise and selected by the audit team to advise—but not decide—on the scope and significance of audit issues, lines of enquiry, identified risks, and audit scope. An adviser may be internal or external to the OAG and is selected on the basis of skills, expertise, relevant knowledge on a particular topic, and experience.